Wallace and Wallace - [2013] FCCA 2224

FEDERAL CIRCUIT COURT OF AUSTRALIA

WALLACE & WALLACE

[2013] FCCA 2224

Catchwords:
FAMILY LAW – Property – contributions – addbacks.

Legislation:

Family Law Act 1975, Pt.VIII, ss.4, 75, 79, 81

Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143
Stanford & Stanford [2012] HCA 52
Bevan & Bevan [2013] FamCAFC 116
NHC v RCH (2004) FLC 93-204
Beatson & Beatson [2013] FamCA 655
Pierce & Pierce (1998) FLC 92-844
Williams & Williams [2007] FamCA 313
C & C (2005) FLC 93-220

Applicant:

MS WALLACE

Respondent:

MR WALLACE

File Number:

DNC 299 of 2012

Judgment of:

Judge Harland

Hearing date:

27 September 2013

Date of Last Submission:

27 September 2013

Delivered at:

Darwin

Delivered on:

19 December 2013

REPRESENTATION

Counsel for the Applicant:

Mr Black

Solicitors for the Applicant:

Cecil Black Family Lawyers

Counsel for the Respondent:

Mr Norrington

Solicitors for the Respondent:

DS Family Law

ORDERS

That within 30 days of the date of these orders the husband pay the wife $23,074.55.
That the property situated at [G] in the State of Queensland Australia, more particularly described in the Certificate of Title as Lot [omitted] (“the [G] property”) be sold and that the parties shall do all acts and things necessary and execute all deeds, documents, instruments and writings necessary to sell the [G] property on the following terms:
(a)The [G] property be listed for sale with a real estate agent agreed between the parties within 21 days of the date of these orders;
(b)In the event that the parties cannot agree on the nomination of such agent they shall jointly approach the President of the Real Estate Institute of Queensland and accept his or her nomination of a real estate agent to sell the [G] property;
(c)That unless otherwise agreed, the initial listing price shall be $275,000 and in the event the parties are unable to agree on the method of sale and conditions of such sale in respect of the [G] property they shall accept the recommendations of the real estate agent appointed pursuant paragraph (2)(b) for the sale of the home in respect of each such matter.
(d)Upon completion of the sale the proceeds of sale shall be applied as followed:
(i)Firstly to pay all costs, commissions and expenses incurred in respect of the sale;
(ii)Secondly to pay all outstanding Municipal rates and other levies due in respect of the [G] property;
(iii)Thirdly, to pay the amount required to discharge the mortgage registered over the home, being the mortgage owing to the ANZ bank, loan account number [omitted];
(iv)Fourthly, $7,000 shall be retained by the husband in an interest bearing account, to meet the expected Capital Gains Tax as assessed; and
(v)Fifthly, the balance to be divided 55% to the wife and 45% to the husband.
(e)That the parties are to each co-operate in every way with the agent including (without limiting the generality of the foregoing):
(i)Making the key available to the agent;
(ii)Allowing inspection of the [G] property at all reasonable times requested by…

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 Wallace and Wallace

Details

AGLC: WALLACE & WALLACE [2013] FCCA 2224
Case: [2013] FCCA 2224
Decision Date: 19 December 2013

CaseChat Overview and Summary

This matter concerned the division of property between a husband and wife, heard by Judge Harland. The primary dispute revolved around the sale of a jointly owned property and the distribution of its proceeds, as well as the division of superannuation entitlements and other assets.

The court was required to determine how the jointly owned property at [G] in Queensland should be sold, including the listing price, the process for appointing a real estate agent, and the order of priority for applying the sale proceeds. Further issues included the allocation of capital gains tax arising from the sale, the division of superannuation interests held by the husband in the [A] Super and [M] Superannuation and Benefits Scheme, and the entitlement to other specified assets and liabilities.

Judge Harland ordered the sale of the [G] property, with specific timelines and procedures for listing, sale, and the distribution of proceeds. The proceeds were to be applied first to sale costs, then to outstanding rates and levies, followed by the discharge of the ANZ mortgage. A sum was to be retained by the husband for capital gains tax, with the balance to be divided 55% to the wife and 45% to the husband. The court also made detailed orders regarding the husband's obligation to pay capital gains tax, including provisions for the wife's indemnification if the retained funds were insufficient. Specific orders were made concerning the division of the husband's superannuation interests, with the wife to receive a specified amount from [A] Super and 100% of splittable payments from the [M] Superannuation and Benefits Scheme. The wife was also to retain sole entitlement to a Mitsubishi Outlander and her superannuation in the [M] Super and [A] Super funds. Each party was to retain other chattels and be solely liable for debts in their own name. The court also appointed a Registrar to execute documents if a party failed to do so and granted liberty to relist for consequential orders.

Orders

Orders of the court

That within 30 days of the date of these orders the husband pay the wife $23,074.55.

That the property situated at [G] in the State of Queensland Australia, more particularly described in the Certificate of Title as Lot [omitted] (“the [G] property”) be sold and that the parties shall do all acts and things necessary and execute all deeds, documents, instruments and writings necessary to sell the [G] property on the following terms:

(a) The [G] property be listed for sale with a real estate agent agreed between the parties within 21 days of the date of these orders;

(b) In the event that the parties cannot agree on the nomination of such agent they shall jointly approach the President of the Real Estate Institute of Queensland and accept his or her nomination of a real estate agent to sell the [G] property;

(c) That unless otherwise agreed, the initial listing price shall be $275,000 and in the event the parties are unable to agree on the method of sale and conditions of such sale in respect of the [G] property they shall accept the recommendations of the real estate agent appointed pursuant paragraph (2)(b) for the sale of the home in respect of each such matter.

(d) Upon completion of the sale the proceeds of sale shall be applied as followed:

(i) Firstly to pay all costs, commissions and expenses incurred in respect of the sale;

(ii) Secondly to pay all outstanding Municipal rates and other levies due in respect of the [G] property;

(iii) Thirdly, to pay the amount required to discharge the mortgage registered over the home, being the mortgage owing to the ANZ bank, loan account number [omitted];

(iv) Fourthly, $7,000 shall be retained by the husband in an interest bearing account, to meet the expected Capital Gains Tax as assessed; and

(v) Fifthly, the balance to be divided 55% to the wife and 45% to the husband.

(e) That the parties are to each co-operate in every way with the agent including (without limiting the generality of the foregoing):

(i) Making the key available to the agent;

(ii) Allowing inspection of the [G] property at all reasonable times requested by the agent;

(iii) Doing or saying nothing to hinder or prevent a sale being effected;

(iv) Ensuring that the [G] property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and

(v) Signing all documents requested by the agent in relation to the listing for sale of the [G] property except a contract or agreement for sale which has not been authorised by the parties' solicitors.

(f) If the [G] property is not sold by private treaty within 3 months, then:

(i) The parties must list the [G] property for sale by public auction with the agent appointed pursuant to paragraph (2)(b);

(ii) That unless otherwise agreed, the reserve price shall be $250,000;

(iii) If the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the [G] property at a price which is not more than 20% below the reserve price; and

(iv) The parties shall each pay and be responsible for payment of one half of auction expenses payable before the home is auctioned;

(v) If the [G] property remains unsold, the parties shall do all acts and things and sign all documents necessary to immediately re-list the property for sale by public auction on a date nominated by the agent, with such auction not to have a reserve price.

(g) In the event that the [G] property is sold by public auction pursuant to order (2)(f), the proceeds of sale shall be applied in accordance with order (2)(d).

That upon the Husband lodging his tax return application in the financial year in which the [G] property is sold, the husband shall pay the Capital Gains Tax assessed from the money retained by the husband in accordance with paragraph (2)(d)(iv) and:

(a) In the event that the retained monies are insufficient to meet the tax assessed, the Wife shall indemnify and reimburse the Husband for 50% of any Capital Gains Tax not covered by the retained monies; and

(b) In the event that there are surplus monies remaining from the retained monies held by the husband in accordance with paragraph (2)(d)(iv), after the entire Capital Gains Tax has been paid, any remaining money shall be distributed between the parties as to 55% to the wife and 45% to the husband.

That in accordance with Order (3), the Husband shall provide the Wife with a copy of his Notice of Assessment and all other documents received from the Australian Taxation Office confirming the amount of Capital Gains Tax payable and in the event that the wife is required to make a payment to the husband pursuant to order (3)(a), the Wife shall make such payment to the Husband within 28 days of the date of the receipt of the written notice from the Husband.

The Wife shall retain and be solely entitled to the exclusion of the Husband to the following property and the Wife shall indemnify the Husband against all liabilities in relation to the following property as at the date of these Orders:

(a) Mitsubishi Outlander registration number “[omitted]”;

(b) All of the wife’s Superannuation entitlements in the [M] Superannuation and Benefits Scheme;

That unless otherwise specified in these orders, each party shall be solely entitled to the exclusion of the other party to all furniture, jewellery, motor vehicles and any other chattels or possessions of whatsoever nature and kind in the possession of that party as at the date of these orders, and that for this purpose, bank accounts are deemed to be in the possession of the person whose name appears on the bank records thereof, insurance policies are deemed to be in the possession of the owner thereof and superannuation entitlements are deemed to be in the possession of the person whose employments or self-employment and contributions provide the conditions for a payment out of such superannuation entitlements.

That unless otherwise specified in these orders, each party shall be solely liable for all loans, credit cards, mortgages and any other liability, in that persons sole name as at the date of these orders.

That each party have liberty to relist the matter at short notice to seek consequential orders.

That if either party, for any reason, fails to execute and return any documents necessary to give effect to these orders as required then unless otherwise provided by these orders, a Registrar of the Federal Circuit Court of Australia at Darwin upon proof by affidavit of such failure is appointed pursuant to section 106A of the Family Law Act 1975 to execute any such unexecuted documents on behalf of the defaulting party and also to perform all acts and things necessary to give force and effect to these orders, AND FURTHER that the defaulting party pay the costs of the other party in relation to the obtaining of the Registrar’s signature to such documents and performing such acts.

10.

That the base amount allocated to Ms W (formerly known as Ms Wallace (“the wife”) from the interest of Mr Wallace (“the husband”) in [A] Super (member number [omitted])(“the fund”) is $17,557.24 of the interest of the husband.

11.

That pursuant to section 90MT(1)(a) of the Family Law Act 1975 (“the Act”) whenever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of the husband from his interest in [A] Super, the wife shall be entitled to be paid an amount of (amount to be determined by the judge) calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Superannuation Regulations”) using the base amount, and there shall be a corresponding reduction in the entitlement of the husband to whom the splittable payment would have been made but for these orders.

12.

That after the service of the payment split notice pursuant to rule 7A.03 of the Superannuation Industry Regulations, the wife shall do all such things and sign all such documents as may be necessary, including but not limited to, exercising her request pursuant to rule 70A.06(1) of the Superannuation Industry Regulations for the rollover or the transfer benefits out of the husband’s interest in the Fund to a fund of the wife’s choice in accordance with rule 7A.12 of the Superannuation Industry Regulations.

13.

That the operative time for the purposes of order (10) is four (4) business days after the date of the service of these final orders upon the Trustee of the Fund.

14.

That until the happening of any of:

(a) The establishment of a separate account in the name of the wife in [A] Super; or

(b) The transfer or “rolling over” into another superannuation fund of the payment split that was created pursuant to these orders; or

(d) The wife executes a waiver of rights within the meaning of section 90MZA of the Act in relation to the payment split created by these orders.

The husband shall be restrained and an injunction shall be issues restraining him, his servants or agents from executing a death benefit nomination in favour of any person or doing any other act or thing which would render any part of his interest in [A] Super “non splittable payment” within the meaning of regulation 12 or regulation 13 of the Superannuation Regulations.

15.

That the Trustee of [A] Super and any subsequent trustee of [A] Super or a successor fund, and the husband and the wife, in accordance with the obligations set out in the Superannuation Regulations shall do such acts and things to sign all such documents as may be necessary to calculate the entitlement of and make payment to the wife in accordance with these orders.

16.

That in accordance with section 90MT(1)(b) of the Act, whenever a splittable payment within the meaning of Section 90ME of the Act becomes payable to or on behalf of the husband from his interest in the [M] Superannuation and Benefits Scheme (the “[M]”), the wife is entitled to be paid (by the Trustee of the [M]) 100% of the splittable payment and there shall be a corresponding reduction in the amount the husband would be entitled to receive bur for these orders.

17.

That the operative time for order (16) is four business days after the service of these final orders on the Trustee.

Background

Background to the litigation

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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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