McCarthy & Sharp (No 3) [2025] FedCFamC1F 513 (1 August 2025)

(a) Within seven (7) days of the date of these Orders, the Applicant, Ms McCarthy("Ms McCarthy") shall provide the Respondent, Ms Sharp ("Ms Sharp") with a panel of three (3) local agents including their fee and marketing expenses;

(b) Within seven (7) days of receiving the panel, Ms Sharp shall choose one (1) listing agent from the panel and notify Ms McCarthy in writing of her selection;

(c) If Ms Sharp fails to notify Ms McCarthy of her selection, then Ms McCarthy shall nominate and appoint the listing agent; and

(d) Both parties shall thereafter forthwith sign the appointment of agent document.

1. That upon the parties appointing the listing agent on an open listing basis, the listing agent will:

(a) provide the tenants of the Town H property with the required notice to vacate, and organise vacant possession of the property; and

(b) market the Town H property as an off-market property prior to the tenants vacating the property.

1. That the parties shall do all acts and things and sign all necessary documents to effect the sale of the Town H property by private treaty as follows:

(a) The list price of the Town H property shall be such amount as agreed between the parties, and thirty (30) days from the date of these Orders a "coming soon" campaign will be marketed until the tenants have vacated the Town H property;

(b) The parties shall cooperate in every way with the listing estate agent in relation to the marketing of the Town H property for sale, including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring the property is clean, neat and in good order at the time of inspection by any prospective buyer;

(c) The proceeds of sale of the Town H property shall be paid in the following manner and priority:

(i) To discharge any mortgage held over the Town H property;

(ii) Payment of the listing agent's commission and advertising or other expenses, if any, payable on the sale.

(iii) Payment of any arrears of rates, water, insurance, body corporate or other expenses for the property;

(iv) Payment of the legal costs relating to the sale;

(v) The balance to be paid:

1. 50% to Ms Sharp; and
2. the remainder to Ms McCarthy.

1. That in the event the Town H property is not sold by private treaty pursuant to Order 3 hereof on or before three (3) months from the date of these Orders, then the parties shall do all acts and sign all documents as are necessary to sell the Town H property by auction as follows:

(a) The Town H property shall be listed with the listing agent appointed under the preceding Orders ("the auctioneer") for sale by auction within a further three (3) months;

(b) The reserve price for the auction shall be such amount as agreed between the parties, but failing agreement being reached between the parties twenty one (21) days prior to the auction, then the reserve price shall be nominated by the auctioneer;

(c) The parties shall give such instructions as are necessary to a solicitor to prepare a contract of sale and provide it to the auctioneer prior to the auction no later than the date sought by the auctioneer and otherwise act on the sale;

(d) The parties shall cooperate in every way with the auctioneer in relation to the sale by auction, including allowing inspection of the property at all times reasonably requested by the auctioneer and ensuring that the property is clean, neat and in good order at the time of any inspection and on the day of auction;

(e) The parties shall attend at the auction and negotiate with the highest bidder in the event of the reserve price not being reached;

(f) The sale price of the property shall be any amount in excess of the reserve price, but in the event the reserve price is not reached, the sale price of the property shall be such amount as agreed between the parties or failing agreement any offer received after the auction to buy the property at a price that is at least 80% of the reserve price shall be accepted by the parties; and

(g) The proceeds of the sale shall be distributed in accordance with Order 3(c).

1. That in the event the Town H property is not sold at the auction pursuant to Order 4 hereof or within fourteen (14) days after the date of the auction by further negotiation, then the parties shall cause a further auction of the property to be held within three (3) months after the date of the first auction and for that purpose the provisions of the preceding Order shall apply.

1. That each party keep to the exclusion of the other any superannuation held in their name.

J Pty Ltd and any other business entities of Ms Sharp

1. That Ms Sharp indemnify and keep indemnified the Ms McCarthy from and against all actions, claims, suits or demands howsoever made against the Ms Sharp in relation to or arising out of any liability associated with the operations of J Pty Ltd, any business names operating under that banner, and J Products and any other liability asserted to be owed by Ms Sharp or arising from any business conducted by her including any taxation liability owed to the Australian Taxation Office ("ATO") by her.

1. That Ms McCarthy indemnify and keep indemnified Ms Sharp from and against all actions, claims, suits or demands howsoever made against Ms McCarthy in relation to or arising out of any liability associated with the operations K Pty Ltd, any business names operating under that banner, and any other liability asserted to be owed by Ms McCarthy or arising from any business conducted by her including any taxation liability owed to the ATO by her.

1. That other than set out in these Orders, the parties shall retain all their right title and interest in their superannuation entitlements and have no further claim on such entitlements of the other.
2. That, subject to these Orders, the parties have the sole right, title and interest in any other property, including choses-in-action, which is at the date of these Orders in their possession, title, or name and they shall be solely liable for and indemnify the other against any personal liabilities.

1. That the parties shall share equally all expenses including mortgage, rates, insurance and any other utilities for the Town H property between separation and it selling, and there is to be an adjustment in favour of the party who has expended the most.
2. That the Applicant provide to the Respondent a proposed minute of order contended to be consistent with the written Reasons for Judgment delivered on 1 August 2025, by no later than 7 August 2025.
3. That the substantive proceedings and the Application in a Proceeding filed 12 June 2025 be listed for Case Management Hearing and pronouncement of Orders at 9.30am on 12 August 2025 in the Federal Circuit and Family Court of Australia (Division 1) at Brisbane.

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).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym McCarthy & Sharp has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. The parties - the Applicant Ms McCarthy (aged 49 years) ("Ms McCarthy") and the Respondent Ms Sharp (aged 41 years) ("Ms Sharp") - were in a de-facto relationship that commenced in mid-2012 and where the parties separated in August 2022.
2. Although parenting and property proceedings were commenced (initially only parenting) in August 2022, final parenting Orders in respect of their son X (born in 2018) were made on 24 March 2025 and provide for a progression of time between X and Ms Sharp, with a week about time arrangement from approximately February 2026. When those consent parenting Orders were made, the parties advised the Court that they were hopeful of negotiating final property orders, however despite attempts to do so, it became necessary to list the property Application for a one-day hearing on 20 June 2025.
3. On the date set for trial, Counsel for Ms McCarthy, Mr Hill and Counsel for Ms Sharp, Mr Christie, presented to the Court a significant minute of consent order, as set out at Appendix One to these Reasons.
4. Apart from confirming an agreement that the parties seek orders to distribute the property equally between them, they also agreed on the sale of the property at G Street(and distribution of proceeds); that each party keep their superannuation entitlements and Ms Sharp would indemnify Ms McCarthy in respect of any actions or liabilities made against Ms Sharp associated with Ms Sharp's business entities including J Pty Ltd (at clause 7), although the signed minute inconsistently (an obvious error) indicated the indemnity was offered by Ms McCarthy. Clause 8 provided (correctly) that Ms McCarthy would indemnify Ms Sharp in respect of any actions or liabilities made against Ms McCarthy arising from the operation of Ms McCarthy's business K Pty Ltd.
5. To the parties' credit, only the following issues remained for determination:

(a) Whether Ms McCarthy or Ms Sharp would retain the jointly owned property situated at L Street Suburb N ("the L Street property"), it being agreed that the party retaining the home will need to make a cash payment to the other party and refinance the existing mortgage; and

(b) the calculation of that cash payment by Ms Sharp or Ms McCarthy, which will depend upon (noting the agreed equal division) two factors:

(a) The net proceeds from the sale of the G Street home; and

(b) The determination of the value of the interest held by Ms Sharp in her business J Pty Ltd- either $259,904 (as Ms McCarthy contends) or nil (as Ms Sharp contends).

1. Although the parties raised an issue of entitlement to stored embryos, the parties resolved that issue such that the Court was not required to make any orders.
2. The form of orders that achieve justice and equity will, of course, be shaped by the parties' agreements and the determinations made by the Court on the disputed issues.

1. Both Counsel accepted, and I agree, that the statutory pathway that was in place prior to 10 June 2025 applies to these proceedings - as the first hearing was in mid-November 2024, and the Court being essentially part heard until judgment was reserved on 20 June 2025.
2. In circumstances where the parties agree that the contribution-based entitlements and any adjustments under s 90SF of the Family Law Act 1975 (Cth) ("the Act") result in an equal distribution, I see no need to record any of the history of the relationship. For completeness, I do say that I am satisfied that:

(c) it is justice and equitable to make an order (s 90SM); and

(d) noting neither party was required for cross-examination, on the evidence relied upon I am satisfied that the parties' agreement that the property interests are divided equally is an outcome within the range of outcomes.

1. In these circumstances, it is appropriate to identify the pool of interests of the parties, all of which were agreed, save for Ms Sharp's interest in her business which for the reasons below, I attribute no value to.

1. In this modest pool, it is appropriate to include the parties' superannuation in the one pool of interests.
2. In respect of the valuation of Ms Sharp's interest in J Pty Ltd, the parties engaged Ms M of the firm O Company to provide a single expert report, and a report dated 26 March 2025 was filed on 19 June 2025. The report reveals that:

(a) the primary asset of the entity is a loan receivable from Ms Sharp;

(b) the business has reported nett annual profit, before an allowance for a salary to Ms Sharp, in the range of $112,732 to $132,033 between financial years 2019 to 2024;

(c) the business does not employ staff but generates income from subcontractors - retaining approximately 40% of revenue received for administration of the business. Tenancy costs are the most significant expenditure;

(d) at paragraph 2.1 of the report, the expert estimates Ms Sharp's total nett interest in the business at $20,430; and

(e) as explained at paragraphs 2.3 to 2.8, because no salary has been paid to Ms Sharp, it seems Ms Sharp rather has elected to draw on the cash flow/profits of the business as a loan - and as at 30 June 2024, a loan totalling $284,284 was repayable to the company by Ms Sharp. If a dividend was paid by the company to clear the loan owing to it (to deal with the Division 7A issue), then tax may be assessed personally against Ms Sharp of $70,246.

1. The cross-examination of Ms M revealed that if a reasonable salary was paid to Ms Sharp, then there is likely to be no nett profit. On this basis, using a nett maintainable earnings methodology, the business interest has no commercial value. I agree.

WHO SHOULD MAINTAIN THE SUBURB N HOME (OR AT LEAST HAVE THE FIRST RIGHT TO DO SO)?

1. Ms Sharp acknowledged that Ms McCarthy had the interest in the Suburb N home at the time of cohabitation but says the contributions to the home and mortgage, together with the decision to transfer the home to Ms Sharp solely in 2014, should persuade the Court it is just and equitable for Ms Sharp to have sole ownership.
2. Ms McCarthy's claim is based on her long connection with the property including that:

(a) she has lived in the street since she was five years of age;

(b) she currently lives in the home of her mother across the road from the subject property;

(c) the home was previously owned by her grandmother and Ms McCarthy says, and I accept, she lived in the property between 1999 and 2013. At cohabitation, the parties lived in the home;

(d) Ms McCarthy acquired the legal interest from her grandmother in 2005 and the transfer to Ms Sharp in 2014 seems to be related to some "asset protection" endeavour. However, in May 2017, the parties agreed to return ownership to joint ownership; and

(e) from separation until approximately July 2024, Ms McCarthy lived in the home with X, when he was in her care. I infer from the financial circumstances of Ms McCarthy (at least) that she decided to rent the property from July 2024 to help meet the costs of the mortgage, and from that time moved in with her mother.

1. I am comfortably satisfied on this history of use that is it just and equitable for Ms McCarthy to have the first opportunity to refinance the mortgage and pay a sum to Ms Sharp to adjust the interests 50/50, as the parties both submit is appropriate.
2. The amount of the payment will depend on what are the nett proceeds of sale from the Town H property, which is on the market for sale. At the time of the trial on 20 June 2025, there was no evidence as to whether the agreed valuation figure of $750,000 will be achieved. Furthermore, under the current order which I made on publication of these Reasons, the available nett proceeds will also depend on sale adjustments; the costs to meet and discharge the mortgage and the costs of sale and marketing (if any), although the net proceeds are agreed to be equally divided.
3. In submissions, I expressed the view that as neither party had produced any evidence as to their capacity to refinance the existing mortgage (of $400,000) and payout the other party, my decision of who shall retain the home at Suburb N was not shaped by a concern a party could not refinance. Now that a decision has been made, Ms McCarthy should be in a position to make such applications as are necessary so that, when the matter returns to my list for the purpose of pronouncing final orders, the Court can receive further submissions as to time limits and also, hopefully, have more evidence as to available nett proceeds of sale of the Town H property.

1. The solicitors who acted for Ms Sharp for part of these proceedings filed an Application in a Proceeding seeking orders that:
   1. That leave is granted to [P Pty Ltd] (ACN [...]) to join the proceedings as an intervenor.
   2. That $145,000 from the sale proceeds is held in the Trust Account of [Ms Sharp's] lawyers pending the resolution of the Application for Costs Assessment and Order of the Federal Circuit and Family Court of Australia.
2. This Application clearly relates to some form of costs dispute between Ms Sharp and her former solicitors. When a representative for the Applicant solicitors appeared before the Court on 20 June 2025, and in circumstances where I was not satisfied Ms Sharp had been served and what her position was on the claim, I indicated that I would not deal with the Application in a Proceeding filed so late and be distracted from dealing with the substantive inter party property proceedings listed on that day, but that it would be appropriate for Ms Sharp to take advice from her currently retained lawyers and, if necessary, to file a Response.
3. I indicated, pragmatically, that although I would not deal with the Application at such short notice, I would allow the solicitors to make submissions before I pronounced final orders.
4. As I have now published these Reasons, I will list the Application in a Proceeding and the substantive matter before me at 9.30am on 12 August 2025.

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann.

APPENDIX ONE

"Orders Agreed and Disputed - Trial - 20 June 2025"

1. That Orders be made that the property of the parties be distributed between them as follows:
   1. 50% to Ms McCarthy; and
   2. 50% to Ms Sharp.

1. That within 14 days of the date of these orders the parties do all things necessary to place the jointly owned property situated at G Street, Town H on the market by private treaty with the listing agent being decided as follows:
   1. That within seven (7) days of the date of these Orders, Ms McCarthy provides Ms Sharp a panel of three (3) local agents including their fee and marketing expenses.
   2. That within seven (7) days of receiving the panel Ms Sharp chooses from the panel and notifies Ms McCarthy in writing of her selection.
   3. If Ms Sharp fails to notify Ms McCarthy of her selection, then Ms McCarthy is to nominate and appoint the listing agent.
   4. Both parties are to fo1ihwith sign the Appointment of Agent thereafter ("the listing agent").
2. That upon the parties appointing the listing agent, the listing agent will:
   1. Provide the tenants with the required notice to vacate and organise vacant possession of the property.
   2. Market the property as an off-market property prior to the tenants vacating.
3. That the parties shall do all acts and things and sign all necessary documents to effect the sale of the property at G Street, Town H and more particularly described as ... ("the property") by private treaty as follows:
   1. The list price of the property shall be such amount as is agreed between the parties, and 30 from days from these Orders a coming soon campaign will be marketed until the tenants have vacated the property.
   2. The parties are to co-operate in every way with the real estate agent in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all times reasonably requested by the agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer;
   3. The proceeds of sale of the property shall be paid in the following manner and priority:
      1. To discharge any mortgage held over the property.
      2. Payment of the agent's commission and advertising or other expenses, if any, payable on the sale.
      3. Payment of any arrears of rates, water, insurance, body corporate or other expenses for the property.
      4. Payment of the legal costs relating to the sale.
      5. The balance to be paid to:
         1. 50% to Ms Sharp and
         2. The remainder to Ms McCarthy.
4. That in the event that the property is not sold by private treaty pursuant to the preceding Order on or before 3 months from the date of these Orders, then the parties shall do all acts and sign all documents as are necessary to sell the property by auction as follows:
   1. The property shall be listed with the real estate agent appointed under the preceding Orders ("the auctioneer") for sale by auction within a further 3 months.
   2. The reserve price of the property shall be such amount as is agreed between the parties, and failing agreement being reached between the parties 21 days prior to the auction, then the reserve price shall be nominated by the auctioneer.
   3. The parties shall give such instructions as are necessary to a solicitor to prepare a contract of sale and provide it to the auctioneer prior to the auction no later than the date sought by the auctioneer and otherwise act on the sale.
   4. The parties agree to co-operate in every way with the auctioneer in relation to the sale by auction including allowing inspection of the property at all times reasonably requested by the auctioneer and ensuring that the property is clean, neat and in good order at the time of any inspection and on the day of auction.
   5. The parties attend at the auction and negotiate with the highest bidder in the event of the reserve price not being reached.
   6. The sale price of the property shall be any amount in excess of the reserve price but in the event of the reserve price not being reached the sale price of the property shall be such amount as is agreed between the parties or failing agreement any offer received after the auction to buy the property at a price that is at least 80% of the reserve price shall be accepted by the parties.
   7. The proceeds of the sale shall be distributed in accordance with Order 2(c).
5. That in the event that the property is not sold at the auction pursuant to the preceding Order or within 14 days after the date of the auction by further negotiation, then the parties shall cause a further auction of the property to be held within 3 months after the date of the first auction and for that purpose the provisions of the preceding Order shall apply.

1. That each party keep to the exclusion of the other any superannuation held in their name.

J Pty Ltd & Any Other Business Entities of Ms Sharp

1. That the Applicant indemnify and keep indemnified the Respondent from and against all actions, claims, suits or demands howsoever made against the Applicant in relation to or arising out of any liability associated with the operations of J Pty Ltd, any business names operating under that banner, and J Products and any other liability asserted to be owed by the Applicant or arising from any business conducted by her including any taxation liability owed to the ATO by her.

1. That Ms McCarthy indemnify and keep indemnified the Ms Sharp from and against all actions, claims, suits or demands howsoever made against Ms McCarthy in relation to or arising out of any liability associated with the operations of K Pty Ltd, any business names operating under that banner, and K Pty Ltd and any other liability asserted to be owed by Ms McCarthy or arising from any business conducted by her including any taxation liability owed to the ATO by her.

1. That other than set out in these Orders the parties shall retain all their right title and interest in their superannuation entitlements and have no further claim on such entitlements of the other.
2. That, subject to these Orders, the parties have the sole right, title and interest in any other property, including choses-in-action, which is at the date of these Orders in their possession, title, or name and they shall be solely liable for and indemnify the other against any personal liabilities.