Introduction
In a recent family law case, Aitken & Aitken [2023] FedCFamC1A 69, the Full Court considered the role of the court in drafting binding orders and examined an appeal against a ‘buy out’ order in the face of an application to sell a relevant entity. This blog post aims to provide an overview of the case and its implications, shedding light on the court’s responsibilities and the factors considered in such appeals.
Case Background
The case involved a couple who were married for 28 years and accumulated wealth totalling approximately $80 million during their marriage. They agreed that their property interests should be adjusted to achieve an overall equal division of assets. However, they disagreed on the valuation and division of certain properties, particularly the company ‘D Pty Ltd.’
At trial, the husband sought to sell D Pty Ltd and divide the proceeds equally between the parties. The wife, on the other hand, argued for a ‘buy out’ arrangement, where the husband would purchase her interest in the company for a specified amount. The trial judge, Wilson J, ruled in favour of the wife and ordered the husband to ‘buy out’ her interest. The husband appealed this decision.
The Court’s Role in Drafting Binding Orders
Before addressing the appeal, the Full Court took the opportunity to discuss the court’s role in drafting binding orders. They noted that Wilson J had directed the parties to provide a minute of order reflecting his reasons on three separate occasions, but the parties failed to agree on the terms. The Full Court expressed concern over the judge’s statement that it was not his job to draft the orders, emphasising that the court has a duty to determine the cause of action and make appropriate, just, and equitable orders.
The Grounds of Appeal – ‘Buy Out’ or Sale
The appeal focused on the primary judge’s decision to order a ‘buy out’ of the wife’s interest in D Pty Ltd instead of selling the company. The husband argued that the judge failed to provide adequate reasons for rejecting his proposal to sell the company and did not consider his capacity to make the additional payment required for the ‘buy out.’ He contended that there was insufficient evidence of his ability to pay the specified amount.
The wife countered by stating that the husband’s capacity to pay was not a contested issue during the proceedings and that he failed to raise any concerns about his ability to make the payment. She argued that the judge’s consideration of the husband’s capacity could be inferred from his reasons.
Court’s Decision and Remittal
The Full Court found in favour of the husband’s appeal, concluding that the primary judge did not adequately address the husband’s capacity to pay and failed to provide sufficient reasons for ordering the ‘buy out.’ They emphasised the importance of considering the husband’s ability to meet the payment, especially when he had raised concerns about it.
Regarding the wife’s request for the Full Court to re-exercise discretion, they determined that due to the nature of the order, which was the final piece needed to give effect to the transactions specified in the orders, a re-exercise of discretion was not possible without receiving additional evidence and submissions.
Implications
The Aitken & Aitken case highlights the court’s responsibility to draft binding orders and make decisions that are appropriate, just, and equitable. It underscores the significance of considering a party’s capacity to comply with orders, particularly when financial obligations are involved. The case also emphasises the need for clear and comprehensive reasons in judicial decisions.
Conclusion
In the Aitken & Aitken case, the Full Court examined the court’s role in drafting binding orders and addressed an appeal against a ‘buy out’ order. The decision underscores the court’s duty to ensure just and equitable outcomes and the importance of considering a party’s capacity to meet financial obligations. The case serves as a reminder of the need for clear and well-reasoned judicial decisions in family law matters.
