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Wheeler & Loggins

Wheeler & Loggins

Case [2023] FedCFamC1F 66 17 February 2023

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Wheeler & Loggins [2023] FedCFamC1F 66

File number(s): SYC 2273 of 2022

Judgment of: HARPER J

Date of judgment: 17 February 2023

Catchwords: FAMILY LAW – PROPERTY – Valuations – Where the husband and his family have interests in complex network of companies and trusts – Where companies and trusts own various businesses and real property – Dispute over which assets are to be valued – Wife asserts that husband has an interest in a corporate group – Where composition of the group is uncertain – Where husband is the object of several discretionary trusts – Issue of valuation of personal property in the form of equitable choses in action – Where properties and businesses sought to be valued are owned and operated by third parties who have not been given the opportunity to be heard – Where valuation would require consent of third parties – Orders for valuation of disputed entities and properties refused.

Legislation:
Evidence Act 1995 (Cth) s 69

Family Law Act 1975 (Cth) s 79

Cases cited:
Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542

Conrad & Conrad [2019] FamCA 106

Dovgan & Dovgan [2021] FamCA 306

Guest v Federal Commissioner of Taxation (2007) 65 ATR 815; [2007] FCA 193

Hall v Hall (2016) 257 CLR 490; [2016] HCA 23

Harris & Dewell (2018) FLC 93-839; [2018] FamCAFC 94

Kelly and Kelly (No. 2) (1981) FLC 91-108; [1981] FamCA 78

Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56

Public Trustee v Smith (2008) 1 ASTLR 488; [2008] NSWSC 397

Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52

Tomaras & Tomaras (2021) 64 Fam LR 237; [2021] FedCFamC1A 82

Woodcock & Woodcock (2021) 64 Fam LR 489; [2021] FedCFamC1F 88

Division: Division 1 First Instance

Number of paragraphs: 45

Date of hearing: 2 February 2023

Place: Sydney

Counsel for the Applicant: Ms Cantrall

Solicitor for the Applicant: Pearson Emerson

Counsel for the Respondent: Mr Fernon SC

Solicitor for the Respondent: Yates Beaggi Lawyers
ORDERS

SYC 2273 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS WHEELER

Applicant

AND:
MR LOGGINS

Respondent

order made by:

HARPER J

DATE OF ORDER:

17 February 2023

THE COURT ORDERS THAT:
1.The document entitled “List of agreed properties and interests to be valued” submitted by the parties on 16 February 2023 be marked Exhibit “A”.
2.The parties shall confer and jointly identify a single expert, or, if necessary, experts, to be appointed pursuant to r 7.03 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), to value the real property, business, corporations and trusts set forth in Schedule 1 to this judgment, as follows:
(a)By agreement, and failing agreement, within seven days of this order, the Applicant Wife (“the wife”) shall nominate no less than three suitably qualified and independent valuers to the Respondent Husband’s (“the husband’s”) legal representative and the husband shall,…

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 Wheeler & Loggins

Details

AGLC: Wheeler & Loggins [2023] FedCFamC1F 66
Case: [2023] FedCFamC1F 66
Decision Date

CaseChat Overview and Summary

These are financial proceedings between the Applicant Wife (“the wife”) and the Respondent Husband (“the husband”). The wife and husband are the only parties to the litigation. Both seek property adjustment orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). It is clear that the husband has financial interests located in a complex structure of corporations and trusts, which are associated with his family, the Loggins family. The value of the husband’s interest is very large, according to the wife, possibly up to $70 million, although the husband does not agree the value is as great. The wife filed an Application in a Proceeding on 16 September 2022, seeking a range of orders, including spousal maintenance, partial property settlement, and for the valuation of a number of companies, trusts, and parcels of real estate. The wife’s application was listed for hearing on 2 February 2023. The parties considerably narrowed the issues for judicial determination. It was agreed that the debate about spousal maintenance and partial property settlement was resolved by the orders of a senior judicial registrar made on 21 October 2022. The parties accepted that those orders did not require any interference by the Court and could simply continue pending further order. That left for determination the dispute about which companies, trusts, or parcels of real estate should be the subject of orders for single expert valuation. There was a large degree of consensus about which real estate, companies and trusts should be valued. The Court required the parties to set out the agreed items for valuation in schedule. This is reproduced as Schedule 1 to this judgment. That left in dispute whether there should be valuation of the following businesses or parcels of real estate: B Venue; C Venue; D Venue; E Venue; F Venue; G Venue; H Venue; Suburb J Extra land; Suburb K land; Suburb L land; Suburb N land; and P Region land. It can be seen that this list can be easily broken into two groups. The first group is comprised of venues (items 7(a) to (g)), while the second group is comprised of parcels of real estate (items 7(h) to (l)). It was also common ground in relation to the parcels of real estate that in each case, the registered proprietor of the legal estate was not the husband. It was not asserted by the wife that the husband enjoyed any proprietary interest in those properties of an equitable or other nature. The wife contended that the husband owns a substantial percentage interest in the group, which she calls the “[Q Group]” in her affidavit. In summary form, she explained her claims at paragraph 17: I contend that [Mr Loggins’] interest in the [Q Group] is approximately $70 million+ net, based on valuations prepared for present negotiations to pay out [Mr Loggins’] sister [Ms R] for her 25% share as she exits the [Q Group]. I contend that [Mr Loggins’] interest in the entirety of the [Q Group] is one third (assuming [Ms R’s] exit has been completed and otherwise a ¼ interest). I discuss further herein my understanding of [Ms R’s] exit from the [Q Group]. It can be seen that it is an important element of the wife’s argument that there had been a valuation undertaken of a number of the disputed items in 2021 for the purposes of a proposed “exit” by the husband’s sister from her interests in the “[Q Group]”. There was no evidence that this had actually happened. But, from the fact of this proposal, the wife invited the Court to infer that if the disputed businesses were relevant to the sister’s interest in the “[Q Group]”, they must be relevant to the interests of the husband in the same group. In the Court’s view, that did not follow. A fundamental problem lies in the uncertainty of the reference to “[Q Group]”. The orders sought by the wife expose the nature of the problem. They suggested a corporate group with a somewhat different composition to the “[Q Group]” referred to at paragraph 17 of the wife’s affidavit, by reference to the schedule. In the wife’s proposed orders, there is given the following definition of the “[Loggins Venue Group]”: “[Loggins Venue Group]" means [S2 Trust, S1 Pty Ltd, T Pty Ltd, U Trust, V Trust, W Trust, Y Trust, Z Trust] and any and all underlying and associated entities including but not limited to [Q Pty Ltd, AA Trust, AB Trust, AC1 Trust, AD Trust, AE1 Trust, AE2 Trust, AF Trust, AG1 Trust, AG2 Trust, AH Trust, AI Pty Ltd, AJ Pty Ltd, AK Pty Ltd, and AL Pty Ltd]; This definition of Loggins Venue Group does not refer, at least explicitly, to any of the disputed items. It suggests that “[Q Group]” and “[Loggins Venue Group]” are not co-extensive, even if they overlap. The point is that the wife’s own material discloses imprecision and some inconsistency about the identity of the companies, trusts, or businesses comprising the group in which she claims the husband enjoys a one third interest, and which therefore should be valued. The problem is further illustrated by other evidence. The Court was not satisfied that the wife had demonstrated, for the purposes of the present application, that there is sufficient reason to conclude that the husband has an interest in any of the disputed items which may be capable of specific valuation so as to ultimately form part of the balance sheet at final hearing. Similarly, the Court was not satisfied the wife had demonstrated any of the disputed items can be relevantly understood as a financial resource of the husband. Practical considerations also militate against ordering the valuation of the disputed items. It was common ground that, among the disputed items, the venues were operating businesses, a valuation of which would require some consideration of their turnover and potentially sensitive commercial information. It was undisputed that they are owned and operated by either corporate entities, or in the case of H Venue, by Mr AQ, who is the father of the husband. It was conceded by the wife that the husband was neither a director nor shareholder of any of the corporate entities that were the proprietors of the disputed items, although the directors of some were his parents, Mr AQ and Ms AR. Thus, as the husband pointed out, irrespective of whether or not any of the disputed items are ultimately held to be a financial resource of the husband, they are owned and operated by third parties. The wife did not grapple clearly with this reality in her submissions, but it was conceded by her that before any valuation of operating businesses could be undertaken, especially where turnover would have to be assessed and potentially commercially sensitive information given to a valuer, the cooperation of third-party owners would be essential. The same difficulty affects the proposed valuation of parcels of real estate. That could only take place if the registered proprietors were prepared to allow access for the purpose of the valuation to be undertaken. The Court was not persuaded that it was appropriate at this

Orders