FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Woodrow & Woodrow [2023] FedCFamC2F 608
File number: MLC 3698 of 2022 Judgment of: JUDGE CHAMPION Date of judgment: 25 May 2023 Catchwords: FAMILY LAW – Property – Undefended proceedings and non-participation of the Husband – Alteration of property interests – Wife seeking alteration of non-superannuation assets – Just and equitable – Husband’s nondisclosure – Premature appropriation of marital assets for Husband’s own benefit – Alteration of superannuation interests – Order equalising parties’ superannuation interests Legislation: Family Law Act 1975 (Cth) ss 75, 79, 81, 90XT, 106A
Family Law (Superannuation) Regulations 2001 (Cth) Pt VI
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r. 6.06
Superannuation Industry (Supervision) Act & Regulations 1994 (Cth) rr. 7A.07, 7A.13
Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA
Baxter & Baxter [2010] FamCAFC 183
Bain & Bain (deceased) (2017) FLC 93-797; [2017] FamCAFC 164
C & C [2005] FamCA 429
Dickons & Dickons (2012) 50 FamLR 244 [2012]; FamCAFC 15
In theMarriage of Hickey (2003) FLC 93; [2003] FamCA 395
Jabour v. Jabour [2019] FamCAFC 78
Keskin & Keskin [2019] FamCAFC 236
Kessey & Kessey (1994) FLC 92
Kingston & Field (No 2) [2020] FamCAFC 235
Kleine & Kleine [2021] FedCFamC1F 51
Lanceley & Lanceley (1994) 18FamLR 71;
Mallet & Mallet [1984] HCA 21; (1984) 156 CLR 605;
Stanford v Stanford (2012) 247 CLR 10; [2012] FCA 52
Waters & Jurek (1995) FLC 92,365, 82376; [1995] FamCA 101
Division: Division 2 Family Law Number of paragraphs: 93 Date of last submissions: 19 May 2023 Date of hearing: 19 April 2023, 19 May 2023 Place: Melbourne Counsel for the Applicant: Mr Arnold Solicitor for the Applicant: Leslie Family Law Respondent: No appearance ORDERS
MLC 3698 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS WOODROW
Applicant
AND: MR WOODROW
Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
25 MAY 2023
THE COURT ORDERS THAT:
1.The Wife have leave to proceed with her Further Amended Initiating Application filed on 29 March 2023 on an undefended basis.
2.After no less than seven (7) days from the date of these Orders, the Wife have leave to apply the proceeds from the sale of the property known as B Street, Suburb C in the State of Victoria currently held in trust by Leslie Family Law, solicitors for the Wife, as follows:
(a)75% thereof to the Wife (noting that the Wife has received $20,000 of this amount by way of part property settlement pursuant to Orders dated 19 April 2023); and
(b)25% thereof to the Husband.
3.The Husband forthwith and not later than 14 days from the date of these Orders do all things and sign all documents necessary to transfer to the Wife, at her expense, all his right, title and interest in Motor Vehicle 1, together with any insurances and warranties associated with the vehicle.
4.The Wife and the Husband forthwith…
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CaseChat Overview and Summary
The court was required to decide whether it was just and equitable to alter the property interests, considering the husband's nondisclosure and premature appropriation of marital assets for his own benefit. The court found that the husband's actions warranted an unequal division of property and granted the wife's application for an alteration of property interests.
Judge Champion determined that the wife's entitlement to property should be 75% and the husband's 25%, reflecting the husband's misconduct. The court ordered the sale of a property in Victoria, with 75% of the proceeds going to the wife and 25% to the husband. Additionally, the court ordered the sale of a property in Queensland, with the proceeds applied to costs, mortgage discharge, capital gains tax, and then divided between the parties. The court also made detailed provisions for the division of superannuation interests, with specific percentages allocated to each party and corresponding reductions in entitlements.
The final orders included provisions for the sale of properties, the division of proceeds, the transfer of assets, and the calculation and payment of capital gains tax. The court also addressed the division of superannuation interests, outlining specific percentages and corresponding reductions in entitlements, as well as the completion of year-end accounts and tax returns for the superannuation fund.
Orders
Orders of the court
MLC 3698 of 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:
MS WOODROW
Applicant
AND:
MR WOODROW
Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
25 MAY 2023
THE COURT ORDERS THAT:
1. The Wife have leave to proceed with her Further Amended Initiating Application filed on 29 March 2023 on an undefended basis.
2. After no less than seven (7) days from the date of these Orders, the Wife have leave to apply the proceeds from the sale of the property known as B Street, Suburb C in the State of Victoria currently held in trust by Leslie Family Law, solicitors for the Wife, as follows:
(a) 75% thereof to the Wife (noting that the Wife has received $20,000 of this amount by way of part property settlement pursuant to Orders dated 19 April 2023); and
(b) 25% thereof to the Husband.
3. The Husband forthwith and not later than 14 days from the date of these Orders do all things and sign all documents necessary to transfer to the Wife, at her expense, all his right, title and interest in Motor Vehicle 1, together with any insurances and warranties associated with the vehicle.
4. The Wife and the Husband forthwith do all things and sign all documents necessary to place the property situated at and known as D Street, Suburb E in the State of Queensland being the property more particularly described by Title Reference … the (Suburb E property) on the market for sale (Suburb E sale) and the proceeds of the sale be applied as follows:
(a) Firstly, to pay all costs, commissions and expenses of the sale;
(b) Secondly, to discharge the loan secured by mortgage payable to Australian and New Zealand Banking Group Limited (ANZ);
(c) Thirdly, the sum of $60,000 to Leslie Family Law, solicitors for the Wife, to be held in trust to discharge Capital Gains Tax arising from the sale, to be calculated in accordance with Order 8 herein; and
(d) The balance then remaining be divided:
(i) 75% thereof to the Wife;
(ii) 25% thereof to the Husband.
5. Pending the sale:
(a) all rental income generated by the Suburb E property shall be applied to the loan secured by mortgage over the Suburb E property, and to give effect to this Order all rental income shall be paid to the Wife; and
(b) the parties shall share equally in payment of all outgoings associated with the Suburb E property.
6. For the purposes of the Suburb E sale:
(a) The Wife shall nominate the listing agent and conveyancer and shall by this Order be authorised to engage the listing agent and conveyancer on behalf of both parties;
(b) The sale price shall be as recommended by the selling agent;
(c) The mode of sale shall otherwise be as recommended by the selling agent;
(d) Both parties shall comply with and follow all directions of the selling agent.
7. These Orders shall be provided to the agent managing the Suburb E property as authorisation for them to change the account where rent received for the property is paid.
8. Upon the sale of the Suburb E property the Husband and the Wife forthwith complete their individual tax returns to ascertain the Capital Gains Tax payable upon the sale and thereafter:
(a) Forthwith provide copies of their relevant tax return and Notice of Assessment to Leslie Family Law;
(b) Leslie Family Law thereafter is authorised to make payment from funds held in accordance with Order 4(c) to the Australian Taxation Office on behalf of each party; and
(c) Any balance remaining or shortfall in the Leslie Family Law trust account shall thereafter be divided between and or paid by the parties in the proportions in accordance with Order 4(d)
9. For the purposes of paragraphs 9 to 24 of these orders:
(a) 'The Superannuation Fund' is the Woodrow Super Fund;
(b) The parties are the members;
(c) 'The Trustee' is Woodrow Pty Ltd of Woodrow Super Fund of which the parties are directors and shareholders
(d) “The Fund Accountants” are F Pty Ltd
(e) The Wife forthwith request the fund accountants to estimate (in writing) the Capital Gains Tax payable by the Superannuation Fund on the sale of G Street, Suburb H (Suburb H CGT)
(f) “The Wife’s CGT amount” shall be one half (50%) of the Suburb H CGT.
10. Paragraphs 9 to 20 of this Order are binding on the Trustee.
11. The specified percentage split to be allocated to the Husband out of the Wife's interest in the Superannuation Fund is one hundred per centum (100%) ("the specified percentage").
12. In accordance with Section 90XT(1)(b) of the Family Law Act 1975;
(a) the Husband is entitled to be paid the specified percentage of each splittable payment out of the Wife's interest in the Superannuation Fund; and
(b) the Wife's entitlement and the entitlement of such other person to whom a splittable payment may be made out of the Wife's interest in the Superannuation Fund is correspondingly reduced.
13. This order have effect from the operative time being the beginning of the fourth business day after the day on which a sealed copy of these orders is served upon the Trustee, with the solicitors for the Wife to serve the Orders within fourteen (14) days.
14. The Trustee and the parties in accordance with the obligations set out under the Act, the Family Law (Superannuation) Regulations 2001, and the Superannuation Industry (Supervision) Act & Regulations 1994 shall do such acts and things and sign all such documents as may be necessary to calculate the entitlement and make the payment in accordance with these orders.
15. That the Husband shall do all things necessary, including but not limited to, exercising his request pursuant to r.7A.07(2) of the Superannuation Industry (Supervision) Regulations 1994 for the payment of the transferable benefits out of the Wife's interest in the Superannuation Fund to the Husband in accordance with r.7A.13 of the Superannuation Industry (Supervision) Regulations 1994.
16. The base amount to be allocated to the Wife out of the Husband's interest in the Superannuation Fund is $234,599 less the Wife’s CGT amount in Order 9(f) (base amount).
17. In accordance with Section 90XT(1)(a) of the Family Law Act 1975 whenever the Trustee makes a splittable payment from the interest held by the Husband in the Superannuation Fund the Trustee shall pay to the Wife the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 being the base amount of $234,599 (provided that such base amount shall not exceed the value of the interest determined under Section 90XT(2)), and there be a corresponding reduction in the entitlement that the Husband would have had but for these orders.
18. Paragraph 14 has effect from the operative time being the beginning of the fourth business day after the day on which a sealed copy of these orders is served upon the Trustees, with the solicitors for the Wife to serve the Orders within fourteen (14) days.
19. The Trustee and the parties in accordance with the obligations set out under the Act, the Family Law (Superannuation) Regulations 2001 and the Superannuation Industry (Supervision) Act and Regulations 1994, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement and make the payment as cash in accordance with these Orders.
20. The Husband and Wife personally and in their capacity as directors of the Trustee execute any document and do all acts and things as may be necessary to liquidate to cash such of the assets in the Superannuation Fund to make payment as cash to the Wife in accordance with these orders.
21. The Husband and Wife shall do all acts and things and execute any document necessary, including but not limited to, executing any document necessary pursuant to r.7A.07(2) of the Superannuation Industry (Supervision) Regulations 1994 for the payment of the transferable benefits out of the Husband's interest in the Superannuation Fund to the Wife in accordance with r. 7A.13 of the Superannuation Industry (Supervision) Regulations 1994.
22. That the parties personally and in their capacity as directors of the Trustee do all acts and things and execute all documents necessary to complete the year end accounts for the Superannuation Fund to 30 June 2022 and 30 June 2023, comply with audit requirements and lodge the tax returns for the Superannuation Fund for such period.
23. As soon as practicable following the payment of the base amount from the Husband's interest in the Superannuation Fund to the Wife:
(a) The Wife do all such acts and things and sign all such documents as may be necessary to transfer or roll over her superannuation entitlements in the Superannuation Fund into the Wife's nominated superannuation fund;
(b) The Wife do all acts and sign all such documents to:
(i) resign from any office held by her in the Trustee; and
(ii) transfer to the Husband any shares she may hold in the Trustee;
(c) The Wife shall cease to be a member of the Superannuation Fund; and
(d) The Husband personally and in his capacity as the director of the Trustee shall thereafter indemnify the Wife and secure the Wife's release from any liability with respect to the Superannuation Fund.
24. Each party have liberty to apply in relation to the implementation of the orders affecting the parties' superannuation interest.
25. The Wife serve a copy of these orders forthwith upon the Trustee.
26. Pursuant to s. 106A of the Act, should the Husband fail to sign documents or do things necessary to comply with these Orders:
(a) If practicable to do so, a Judicial Registrar of this Honourable Court be and is hereby authorised to execute documents on his behalf; or
(b) If a legal practitioner is required to secure compliance with the Orders, Ms J of T Lawyers or her agent be engaged to execute such document or instrument or do all such things as may be necessary to give effect to these Orders.
27. 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 property (including chooses in action) in the possession of such party as at the date of these orders;
(b) insurance policies remain the sole property of the owner thereof;
(c) each party forego any claims he or she may have to any superannuation or related benefits belonging to or earned by the other;
(d) each party 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;
(e) any joint tenancy is hereby expressly severed; and
(f) any joint bank account be divided equally between the parties.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
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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