Ashmore and Ashmore
[2017] FCCA 86
•24 January 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
ASHMORE & ASHMORE [2017] FCCA 86
Catchwords:
FAMILY LAW – Property – application by the Husband for property settlement – issue in identifying the asset pool – where some of the property of a trust was not valued – characterisation of a farming crop that is yet to be harvested – section 75(2) factors – Husband’s superior earning capacity and financial resources. Held – 60/40 percent split of the asset pool in favour of the Wife – equalisation of the parties’ superannuation.
Legislation:
Family Law Act 1975 (Cth), ss.75(2), 79(2), 79(4)
Cases cited:
Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FamCA 395
Stanford & Stanford [2012] HCA 52
Bevan and Bevan [2013] FamCAFC 116
Applicant: MR ASHMORE
Respondent: MS ASHMORE
File Number: MLC 9009 of 2014
Judgment of: Judge Bender
Hearing dates: 7 November 2016, 8 November 2016,
9 November 2016, 23 November 2016
Date of Last Submission: 23 November 2016
Delivered at: Melbourne
Delivered on: 24 January 2017 REPRESENTATION
Counsel for the Applicant: Ms Wheeler
Solicitors for the Applicant: J A Middlemis
Counsel for the Respondent: Mr Turner
Solicitors for the Respondent: Kerang Family Law
Counsel for the Independent Children’s Lawyer: Ms McNamee
Independent Children’s Lawyer Joliman Lawyers ORDERS
(1)On or before 24 May 2017 (“the date”) the Husband pay to the Wife the sum of $101,925 (“the payment”).
(2)Contemporaneously with the payment:
(a)the Wife sign all documents and do all things necessary to transfer to the Husband at the expense of the Husband all of her right, title and interest in the real property situate and known as Property S being the whole of the land more particularly described in the Certificate of Title Volume (omitted) Folio (omitted) (“the former matrimonial home”);
(b)the Husband indemnify the Wife against all payments and liability pursuant to any mortgage registered number (omitted) to (omitted) Bank (“the mortgage”) and all rates, taxes, and outgoings of or with respect to the real property of whatsoever nature and kind;
(c)the Husband refinance the mortgage so as to discharge the Wife’s liability therein;
(d)the Husband retain to the exclusion of the Wife all of his right, title and interest in the real property situate and known as Property L, being the whole of the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“Property L”);
(e)the Husband indemnify the Wife against all payments and liability pursuant to any mortgage registered number (omitted) to the (omitted) Bank (“the mortgage”) and all rates, taxes and outgoings of or with respect to Property L of whatsoever nature and kind; and
(f)the Husband discharge any liability of the Wife with respect to Property L.
(3)In the event the whole of the payment has not been made by the date then:
(a)the parties shall do all things necessary to sell the former matrimonial home (“the first sale”) and the proceeds of the sale be applied to:
(i)first to pay all costs, commissions and expenses of the said sale;
(ii)secondly to discharge the mortgage and any other encumbrance affecting the former matrimonial home;
(iii)thirdly, so much of the payment that is then outstanding together with interest thereon at the rate of 9.5 per centum per annum adjusted monthly from the date to the Wife; and
(iv)fourthly, the balance if any to the Husband.
(b)if after payment to the Wife of the net proceeds of sale of the former matrimonial home pursuant to Order (3)(a)(iii) the whole of the payment has not been made then the Husband sign all documents and do all things necessary to transfer to the Wife his interest in Property S to be held on trust for sale and the Wife undertake all steps necessary to sell the Husband’s rural property including any necessary VCAT proceedings with respect to the Husband’s brother and then Property S be forthwith sold altogether out of Court (“the second sale”) and the proceeds of the sale be applied:
(i)first to pay all costs, commissions and expenses of the said trust transfer and the sale and VCAT proceedings;
(ii)secondly to discharge the mortgage and any other encumbrance affecting Property S;
(iii)thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 9.5 per centum per annum adjusted monthly from the date to the Wife; and
(iv)fourthly the balance to the Husband.
(4)Pending the payment or completion of the first sale and/or the second sale:
(a)the Husband have the sole right to occupy the former matrimonial home and Property S and that during such right of occupation the Husband pay all instalments pursuant to the mortgages and all rates and taxes and like apportionable outgoings of the former matrimonial home and of Property S as they fall due;
(b)the parties hold their respective interests in the former matrimonial home and Property S upon trust pursuant to these orders;
(c)neither party encumber or further encumber the former matrimonial home and Property S without the consent in writing of the other party.
(5)For the purpose of these orders, pursuant to section 90MT(1)(a) of the Family Law Act 1975 (Cth):
(a)the operative time is the date 4 days after service of these Orders on the trustee;
(b)the member spouse is the Husband Mr Ashmore born (omitted) 1976; and
(c)the non-member spouse is the Wife Ms Ashmore born (omitted) 1979.
(6)The base amount allocated to the non-member spouse is $33,530 of the interest held by the member spouse in the (omitted) Superannuation Fund Account Number (omitted).
(7)Whenever the trustee makes a splittable payment for the interest held in the (omitted) Superannuation Fund by the member spouse MR ASHMORE born (omitted) 1976, the trustee shall pay to the non-member spouse her entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) and there shall be a corresponding reduction in the entitlement that the member spouse would have had but for these orders.
(8)The Husband be restrained by himself, his servants or agents from making any binding death benefit nomination to the trustee of the (omitted) Superannuation Fund in favour of any child who is an eligible beneficiary within the meaning of Regulation 13 of the Family Law (Superannuation) Regulations 2001 (Cth) which would have the effect of diminishing the value to the Wife of the splitting order made in paragraph (6) of these orders.
(9)Paragraphs (5) to (8) (inclusive) of these orders are binding on the trustee of the (omitted) Superannuation Fund.
(10)The parties forthwith sign all documents and do all things necessary to sell the (omitted) Holiday Investment and the proceeds of sale be applied to:
(a)firstly, to pay all the costs, commissions and expenses of the sale;
(b)secondly, to discharge the loan on the (omitted) Holiday Investment; and
(c)thirdly, any balance remaining be divided equally between the parties.
(11)In the event the proceeds of sale of the (omitted) Holiday Investment are insufficient to pay out the monies owing on that investment, the parties shall each pay one half of any shortfall.
(12)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 choses-in-action) in the possession of such party as at the date of these orders and the chattels in the former matrimonial home will be deemed to be in the possession of the Husband save for the items listed in “Annexure A” which the Husband shall make available for collection by the Wife on or before 7 February 2017;
(b)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the life insured named therein;
(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 of the parties in any real or personal estate is hereby expressly severed; and
(f)each party foregoes any claim they have to any inheritances to which the other party is entitled to either presently or in the future.
“Annexure A”
Chattels to be made available to the Wife
a)treadmill;
b)2 x wine barrels;
c)1 x flat screen LCD TV;
d)fold out sofa;
e)rug;
f)room divider;
g)4 x wagon wheels;
h)Magic Bullet;
i)water fountain;
j)children’s kinder folders;
k)the Wife’s deceased mother’s rose glass bowls and glasses (if located);
l)large pot brought with the Wife’s father;
m)1 x (omitted) tractor seat (if located);
n)the photographs / SD Cards of the children to be made available to the Wife on 7 February 2014 for copying by the Wife at her expense, the originals to be returned to the Husband by 28 February 2017; and
o)painted saw blades (by the Wife’s deceased mother) (if located).
IT IS NOTED that publication of this judgment under the pseudonym Ashmore & Ashmore is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNEMLC 9009 of 2014
MR ASHMORE Applicant
And
MS ASHMORE Respondent
REASONS FOR JUDGMENT
Introduction
1.This matter relates to the division of property between the parties following the breakdown of their relationship.
2.The matter was initially listed for both property and parenting matters but to the parties’ credit they resolved parenting matters during the running of the trial.
3.Final parenting orders were made for the parties’ three children, X born (omitted) 2005, Y born (omitted) 2008 and Z born (omitted) 2011 (‘the children’) to live equally with each of the parties.
4.The Husband is seeking property orders where he receives 55 per cent of the parties’ real assets and a superannuation splitting order that equalises the parties’ superannuation entitlements.
5.It is submitted on behalf of the Husband that such an order is just and equitable as he made a greater contribution than has the Wife. It is his evidence that during the relationship he was the primary income earner, he significantly assisted in the care of the children during the relationship and has been their primary carer after separation, the Wife spent considerable sums on personal items which did not benefit the parties or the children, leaving an $18,000 credit card debt at separation which the Husband has been servicing since separation and because during the marriage the Wife accessed $31,000 from the Ashmore Brothers Trust which is unaccounted for.
6.The Wife is seeking orders that she receive 65 per cent of the parties’ real assets and there be a superannuation splitting order equalising the parties’ superannuation entitlements.
7.It is submitted on behalf of the Wife that the orders she seeks are just and equitable because of the Husband’s superior earning capacity, his failure to properly disclose the assets and income of the Ashmore Brothers Trust and because of the considerable financial resources he has arising from the Ashmore Brothers Trust and its current harvest.
Background
8.The Husband was born on (omitted) 1976 and is currently 40 years of age. He is employed full time as a (occupation omitted) with (employer omitted) and has been for over twenty years. The Husband earns $66,000 per annum in this position. The Husband has not re-partnered.
9.The Husband is also in partnership with his brother Mr D conducting a pastoral/cropping business through the auspices of the Ashmore Brothers Trust (“the Trust”). The Husband and his brother own 640 acres of farming land and lease further farming land on which they conduct their business.
10.The Wife was born on (omitted) 1981 and is currently 35 years old. She is employed on a casual basis as a (occupation omitted) working in the (employer omitted). The Wife earns approximately $22,000 per annum. The Wife has re-partnered with Mr A. Mr A is a (occupation omitted) and earns $750 per week. The Wife commenced a relationship with Mr A in (omitted) 2013.
11.The Husband and Wife commenced cohabitation in 2000 and married on (omitted) 2004.
12.The parties separated under the one roof in January 2014. They unsuccessfully attended relationship counselling. The Wife left the former matrimonial home in April 2014 and moved in with Mr A. The children remained in the primary care of the Husband.
13.The Husband and his brother commenced cropping land at Property L somewhere between 2000 and 2002. This business was initially conducted as a partnership. In or around 2004 the Trust was established and the business has since then been conducted through the Trust.
14.The Husband and his brother jointly purchased 640 acres at Property L, (“Property L”) in 2002. This purchase was not registered until May 2006. It has an agreed current value of $370,000 and is encumbered by a mortgage of $240,000. The Husband’s 50 per cent interest in Property L is $65,000.
15.The parties purchased the land on which they built the former matrimonial home at Property S) (“the former matrimonial home”) in August 2006 for $82,000. The parties built the former matrimonial home in 2007 and moved into the property in Christmas 2007. The former matrimonial home has an agreed current value of $300,000 and is encumbered by a mortgage of $227,000.
16.Prior to the birth of X the Wife was employed on a full-time basis as an (occupation omitted) at (employer omitted). With X’s birth she assumed full time home duties. In early 2013, the Wife commenced working for Ms K in her (omitted business) for a few hours each week and was paid in (omitted) for her and the Husband.
17.At a date neither party deposed to, the parties purchased an interest in (omitted) Holiday Investments (“(omitted)”). They currently owe $12,183 on this investment. Both parties agree (omitted) is to be sold.
18.At separation the parties had credit cards debts of $18,000.
19.Since separation the Husband has serviced the mortgage on the former matrimonial home, the credit card debt and the (omitted) debt.
The Evidence
20.
The Husband relies on his affidavits sworn 26 September 2014,
26 November 2014, 8 January 2015, 27 February 2015, 19 November 2015, 17 February 2016 and 30 October 2016. He also relies on the only Financial Statement filed by him which was sworn 26 September 2014. The Husband also gave lengthy viva voce evidence at the final hearing.
21.The Husband also relies on the affidavit of his accountant Mr G sworn 29 February 2016. The Wife did not require Mr G for cross-examination.
22.
The Wife relies on her affidavits sworn 20 October 2014, 27 January 2016, 10 June 2016, 12 November 2015, 15 February 2016 and 27 October 2016. She also relies on her Financial Statement sworn
12 November 2015. The Wife gave viva voce evidence at the final hearing.
23.It is noted at least 95 per cent of the contents of the affidavits relied upon by the parties relate to parenting matters.
The Issues
24.Having read the material relied on by the parties, heard the evidence, considered their proposals and the submissions made on their behalf, the issues requiring determination in order to determine what is a just and equitable order for property division between the parties are:
a)What is the value of the plant and equipment owned by the Trust given there are items of plant equipment which were not made available or made known to the valuer engaged by the parties to value the Trust plant and equipment?
b)What is the value of the parties’ motor vehicles?
c)Has there been a deliberate failure to disclose by the Husband in relation to the income and financial management of the Trust such that the Court should not be unduly cautious about making findings in favour of the Wife?
d)How should the Court treat the crop that is currently in the ground? (i.e.; as property, an income stream or a financial resource?)
e)Did the Wife access $31,000 from the Trust’s account without the consent of the Husband which is unaccounted for and should that amount be “added back” into the pool of assets for distribution between the parties?
f)Has the Husband made a greater contribution than the Wife both during the marriage and after separation by way of his role as primary income earner, his parenting role and the Wife’s use of matrimonial income for her personal use and not the benefit of the family?
g)Should there be adjustment in the Wife’s favour pursuant to section 75(2) of the Family Law Act 1975 (Cth) (‘the Act’), and in particular:
i)the disparity in the parties’ earning capacity;
ii)the manner in which the Trust’s income can be/is minimised by the ‘merging’ of the farming expenses between the Trust and the Husband’s parent’s farm;
iii)the benefit to the Husband of some of his expenses including fuel, telephone and car repairs being paid by the Trust; and
iv)the benefit to the Husband if the Court is of the view the current “crop in the ground” is a financial resource of the Husband.
The Law
25.Section 79 of the Family Law Act 1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
26.Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
27.The matters to be taken into account under section 75(2) of the Act are as follows:
(a)the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
28.The High Court in the matter of Stanford v Stanford [2012] HCA 52 held that prior to making orders for the division of the property in which the parties have an equitable interest in accordance with the provisions of section 79 of the Family Law Act 1975 (“the Act”), the Court must first determine that it is just and equitable that the Court make such orders.
29.The High Court in Stanford (supra) held that in the majority of matters the decision as to whether it is just and equitable for the Court to make property orders is easily resolved by the breakdown of the marital relationship and the mutual desire of both parties for orders altering their respective property interests.
30.This is such a matter, and thus it is apparent it is just and equitable that orders be made adjusting property matters between the parties.
31.Prior to the decision in Stanford (supra), a trial judge would in a majority of cases follow the four step approach in determining how to alter property interests between the parties as articulated by the Full Court in Hickey and Hickey and Attorney General for the Commonwealth of Australia [2003] FamCA 395.
32.The four step process set out in Hickey is as follows. Firstly, the Court will determine the nature of the property pool and attribute values to the assets listed in that pool. Secondly, the Court considers the contributions of the parties to the property pool including direct and indirect financial contributions and non-financial contributions often in the form of homemaker or parent. Thirdly, and after considering entitlements based on contributions the Court determines whether any further adjustments to either parties entitlement is proper, given the considerations under s.75(2) of the Act. Finally, the Court stands back and considers whether the proposed division of the property is just and equitable pursuant to section 79(2) of the Act.
33.The High Court in Stanford (supra) and subsequently the Full Court in Bevan and Bevan [2013] FamCAFC 116 observed that this four step approach should not be rigidly followed.
34.However, the Full Court in Bevan (supra) also indicated that in the majority of property cases, the four step approach is an appropriate manner in which to approach the determination of the division of properties between parties once the Court is satisfied that such division is just and equitable.
35.I am satisfied that this is a matter where the four step approach of Hickey is the appropriate approach to be taken to determine a just and equitable division of property between the parties.
Assets and Liabilities
What is the value of the Ashmore Brothers Trust plant and equipment?
36.By agreement, the parties arranged for the plant and equipment of the Trust to be valued.
37.Whilst that valuation has not been provided by either party to the Court, it is the parties’ evidence that the Husband advised the valuer that the only items of value of the Trust were a truck, trailer, canola harvester front and two generators. These items were valued at $86,000 which means the Husband’s interest is $43,000. This figure is not in dispute.
38.Tendered into evidence during the running of the matter was an annexure to the valuation that was prepared in relation to the Trust’s plant and equipment. That annexure is as follows:
Number | Item description | Decl. start date | Cost | Private Use | Pooled Amount | Sale Proceeds |
| 01 |
|
|
|
|
| Obsolete Software |
| 02 |
|
|
|
|
| Obsolete |
| 03 |
|
|
|
|
| Obsolete |
| 04 |
|
|
|
|
| Obsolete Software |
| 05 |
|
|
|
|
| Not property of trust |
| 06 |
|
|
|
|
| Not property of trust |
| 07 |
|
|
|
|
| Sold |
| 08 |
|
|
|
|
| Sold |
| 09 | Welder/Generator 01/04/2009 | 01/04/2009 | $5,000.00 | 0.00% | 5,000.00 | Fair condition |
| 10 | (omitted) truck 21/08/2009 | 21/08/2009 | 25,000.00 | 0.00% | 25,000.00 | |
| 11 |
|
|
|
|
| Not property of trust |
| 12 |
|
|
|
|
| Not property of trust |
| 13 |
|
|
|
|
| Not property of trust |
| 14 | Honda (omitted) Generator – 27/01/2011 | 17/01/2011 | $1,681.82 | 0.00% | 1,681.82 | Fair condition |
| 15 | Solar Panels ((omitted)) 12/05/2011 | 12/05/2011 | $4,613.63 | 0.00% | 4,613.63 | Not property of trust |
| 16 | Canola Front 07/11/2011 | 07/11/2011 | $13,000.00 | 0.00% | 13,000.00 | |
| 17 | Lusty tri-axle tipping trailer | 16/02/2012 | $36,965.00 | 0.00% | 36,965.00 | |
| 18 |
|
|
|
|
| Obsolete |
| 19 |
|
|
|
|
| Obsolete software |
| 20 |
|
|
|
|
| Obsolete software |
39.The table listed above is taken from the “Depreciation Schedule” contained in the Ashmore Brothers Trust taxation return for the financial year 2013/2014.
40.At the foot of the table are the following comments:
“I am instructed the money from the items disposed were reinvested into the farming operation, ie the (omitted) Trailer was replaced by the Lusty tri-axle trailer. Computer and computer software has no value due to becoming obsolete. Some items were purchased through the trust but are not assets of the trust.
My client instructs the only property of the Ashmore Brothers Trust that has value are: truck, trailer and harvester front; all else has depreciated to nil.”
41.It would appear that the table and the items that have been crossed off were provided to the valuer by the Husband’s solicitor on the Husband’s instructions.
42.It is submitted on behalf of the Wife that the items crossed out in the above table should have been made available to the valuer for valuation and not unilaterally excluded by the Husband from the valuation process.
43.The Husband was cross examined at some length in relation to the items that were not valued by the parties’ joint valuer.
44.It is the Husband’s evidence that the Auto-Steer GPS, Greenstar 2 system and the two Auto steers are computer GPS and software equipment used on harvesting equipment. It is the Husband’s evidence that the items listed are obsolete, are no longer used and have all been replaced by his parents with up to date equipment. It is the Husband’s evidence that these items have no value.
45.In relation to the fuel tank and bale forks, it is the Husband’s evidence that these items are rusted and are no longer usable and have no value.
46.In relation to the Silo base, concrete Silo and Silo pads and the two 40 foot containers, it is the Husband’s evidence that whilst purchased by the trust, the items are all located on his parents’ farm property. It is the Husband’s evidence that it was for this reason he did not consider these items to be trust property.
47.In relation to the shed and solar panels, it is the Husband’s evidence that these items are located at the former matrimonial home and have been included in the valuation for that property. It is therefore submitted by the Husband that to include them as part of the valuation of the Trust assets would be “double-dipping.”
48.In relation to the computer, it is the Husband’s evidence that this item is located in the former matrimonial home and he does not consider it to be a trust asset.
49.When giving his viva voce evidence, the Husband also indicated that the Trust has recently purchased a lentil harvester front for $10,000.
50.It is submitted on behalf of the Wife that save for the auto-steer items which she concedes are obsolete, all other items that have not been sold that are listed in the table should be included as the Trust assets together with the recently purchased lentil harvester front.
51.It is further submitted on behalf of the Wife that the “best evidence” available to the Court as to the value of those items that are contained in the above table are those attributed to them in the Depreciation Schedule. This gives those items a total value of $69,573.00.
52.It is submitted on behalf of the Wife that with the fluxion of time since 2014 those values will have decreased and proposed they be reduced by a third leaving a value of $46,382.00. It is submitted that the Husband’s share of those further trust assets is $23,191.00.
53.It is further submitted that the Husband has a 50 per cent interest in the new harvester front.
54.It is therefore submitted on behalf of the Wife that the total value of the Trust plant and equipment is $142,382.00 and the Husband’s 50 per cent interest is $71,191.00.
55.Mr G, the Husband’s accountant, deposes in paragraphs 10 and 12 of his affidavit sworn 29 February 2016 the following:
“10. A further claim by the former wife (Ms Ashmore) is that that [sic] the values shown in the Depreciation Schedule from the Trust’s tax returns represent the current values for the items. This suggestion is an absolutely incorrect and is a total misunderstanding or what the depreciation schedule represents.
11. When considering the documentation and in particular the heading above the values shown where the word “COST” is shown it is important to understand that this figure represents the cost of the item when purchased and not the “market value” or value of the item if sold today. In the same schedule there is another column that says “Acq Date”, this is the date on which the item was originally purchased by the trust.
12. As an example the Canola Front listed was acquired on
7 November 2011 at a cost of $10,000. It is currently valued by the valuer at $8,000, which is clearly not value in the Depreciation Schedule. It has gone down in value since it was acquired.
56.In his closing on behalf of the Husband, the Husband’s Counsel submitted that the Court cannot accept the figures in the Depreciation Schedule as reflecting the value of the items that remain in dispute.
57.By way of compromise the Husband’s Counsel advised the Court the Husband would agree to there being additional Trust plant and equipment included in the pool of assets at the following values:
Silo’s and concrete base
$4,000
Shipping containers
$2,500
Computer
$250
New Header Front
$7,000
Total: $13,750
58.Counsel for the Husband offered no explanation as to the basis upon which the Husband put forward these figures as representing their current value.
59.When considering all the items in dispute, I am satisfied by the Husband’s evidence that all the various GPS and auto-steer items including the Green Star 2 item are obsolete, particularly when the date of acquisition of those items is considered. Therefore they have no value.
60.I also accept the Husband’s evidence in relation to the fuel tanks and bale forks no longer having a value given their age, state of disrepair and the minimal purchase price shown in the table.
61.In relation to the shed and solar panels, I am satisfied that those items have been incorporated into and form part of the value of the former matrimonial home. To value them as Trust assets would be “double-dipping.” Neither of these items can be removed from the matrimonial home and if they were, it would result in a commensurate reduction of the value of that property.
62.In relation to the items that are located on the Husband’s parents’ farm being the silo, silo base and containers, I accept the evidence of the Husband’s accountant Mr G that the figures shown in the Depreciation Schedule do not reflect their proper value.
63.Given the absence of any other evidence, the estimate given by the Husband as to their current value will be the best evidence before the Court as to their current value.
64.Given the age of the computer, now being nearly five years of age, a figure of $250.00 appears to be a reasonable value for that item.
65.The remaining item is the new header front which was purchased very recently for $10,000. I do not accept the Husband’s evidence that it has depreciated in value by $3,000 in a very short period of time. In the circumstances I am of the view that its value is its purchase price of $10,000.
66.In these circumstances I have formed the view that in addition to the agreed value of the plant and equipment of the Trust there should be an additional amount of $16,750.00 added to the value of the Trust’s plant and equipment.
67.Accordingly, I find that the total value of the Trust’s plant and equipment is $99,750.00 in which the Husband has a 50 per cent interest totalling $49,875.00.
What is the value of the parties’ motor vehicles?
68.The Husband owns a Mitsubishi (omitted) motor vehicle and the Wife owns a Holden (omitted).
69.It is the Husband’s evidence that the motor in his Mitsubishi (omitted) motor vehicle has blown up and that it is currently not driveable. It is the Husband’s evidence that the cost of repairing the motor vehicle exceeds its value and therefore it has minimal value.
70.It is the Husband’s evidence that the “Redbook” value of the Wife’s motor vehicle is $8,000. It is the Wife’s evidence that her motor vehicle has done over 230,000 kilometres and is in poor condition. As a result of recent bingles the motor vehicle has been damaged. The Wife provided photographs that substantiated her evidence in this regard.
71.It is the Wife’s submission that in these circumstances the actual value of her motor vehicle is minimal and is not as reflected in the Redbook.
72.It is the Wife’s submission that as both parties have motor vehicles of relatively little value, neither vehicle should be included in the list of assets for division between the parties.
73.Given the parties’ evidence in relation to their respective motor vehicles and absent either party providing sworn valuations in relation to those vehicles, I have formed the view that neither vehicle has any great value and I am persuaded by the Wife’s argument not to include the motor vehicles in the pool of assets for division between the parties.
How should the Court treat the current “crop in the ground?”
74.As was properly submitted by Counsel for the Wife, the manner in which the Court has treated crop in the ground matters before it has varied. Subject to the circumstances of the case it has been considered to be property of the parties, an income stream or a financial resource.
75.In this matter there is no evidence of what the value of the crop is given that at the time of the hearing of this matter it was as yet to be harvested.
76.Similarly, the income that the crop will generate and the income stream that it will provide to the Husband and his brother cannot be known until such time as the crop is sold and the appropriate adjustments made for the Trust expenditure.
77.In all these circumstances, I am satisfied that the crop in the ground in this matter should be considered by this Court to be a financial resource of the Husband.
Did the Wife access $31,000 from the Ashmore Bros Trust Account?
78.The Husband alleges that during the marriage the Wife withdrew $31,000 from the Trust’s account and she has not accounted for or explained how those monies were expended.
79.It is the Wife’s evidence that she did not have access to the Trust’s account and it was therefore not possible for her to have accessed any funds from that account, let alone $31,000.
80.The Husband’s evidence is that the Wife had access to the Trust’s bank account as did his brother’s wife. He did not however place before the Court any evidence that substantiated this claim.
81.The only evidence of the Husband that I have been able to find relating to this allegation by the Husband is contained in paragraph 21 of the Husband’s affidavit sworn 19 November 2015. The Husband deposes as follows:
“I paid all the farm bills from the trust bank account and both Ms Ashmore and I had access to the account via the internet. No matter what I said to Ms Ashmore she did not seem to understand that the payments received into the account were not profit and until the farm expenses were paid out of those monies we did not know if there was a profit. From the statements I do have of the Trust Ms Ashmore has removed $31,100 as per the annexed statements marked “A16”.
82.
The annexures marked “A16” of the Husband’s affidavit sworn
19 November 2015 are copies of a selection of (omitted) Bank statements for the Trust between December 2010 and April 2014. There are a number of entries that have an asterisk against them, though there is no explanation by the Husband what the asterisks mean or why he alleges those monies were withdrawn by the Wife. Further, when added up the asterisked figures total $37,461.30, not $31,000.
83.Accordingly, the Husband has not placed any evidence before the Court that in any way substantiates his claim the Wife accessed $31,000 from the Trust’s account without his or her brother’s consent.
The Pool
84.Accordingly, the assets and liabilities of the parties is determined to be as follows:
Matrimonial Assets and Liabilities
Assets
Property S, (former matrimonial home) $300,000 less mortgage to (omitted) Bank -$227,000 $73,000 Husband’s 50 per cent interest in Property L $185,000 Less mortgage to (omitted) Bank -$120,000 $65,000 Husband’s 50 per cent interest in Ashmore Brothers Trust $49,875 $49,875 Total Assets $187,875
Liabilities
Credit Card debt at September 2016
-$18,000
-$18,000
Total Assets and Liabilities
$169,875.00
Superannuation
Wife
$32,675
Husband
$99,734
Total Superannuation
$132,409.00
*(omitted) Holiday Investment liability owing
$12,183.00
(to be sold)Has there been a deliberate failure by the Husband to disclose the assets, income and financial management of the Ashmore Brothers Trust?
85.Counsel for the Wife took the Husband through a detailed and vigorous cross-examination of the Trust financial statements and taxation returns for the financial years ending July 2013 through to July 2016.
86.The figures discussed with the Husband were as follows:
2012/2013
Income
Expenses
Crops
$234,481.00
Depreciation
$18,464.00
Contracting Work
$22,465.00
Hire of Plant
$2,000.00
Hire of Plant
$6,250.00
Repairs and Maintenance
$24,913.00
$263,196.00
Fertiliser
$74,800.00
Spraying
$37,275.00
Rent
$13,479.00
Profit (before Tax) as shown in Taxation Return: $13,479.00
2013/2014
Income
Expenses
Crops
$267,945.00
Hire of Plant
$48,512.00
Contracting Work
NIL
Repairs and Maintenance
$29,014.00
Hire of Plant
$2,125.00
Fertiliser
$38,241.00
Sale of fixed assets
$1,917.00
Rent
$46,649.00
Government
$182.00
Spraying
$17,476.00
$272,169.00
Profit (before Tax) as shown in Taxation Return: $24,427.00
2014/2015
Income
Expenses
Crops
$160,149.00
Hire of Plant
$29,273.00
Contracting Work
$30,844.00
Repairs and Maintenance
$18,879.00
Hire of Plant
$11,160.00
Fertiliser
$NIL
$202,153.00
Spraying
$39,715.00
Rent
$27,955.00
Profit (before Tax) as shown in Taxation Return: $6,164.00
2015/2016
Income
Expenses
Crops
$157,276.00
Hire of Plant
$3,439.00
Contracting Work
$2,760.00
Repairs and Maintenance
$19,069.00
Hire of Plant
$4,150.00
Fertiliser
$NIL
$164,186.00
Spraying
$16,017.00
Rent
$27,955.00
Profit (before Tax) as shown in Taxation Return: $17,294.00
87.The Husband agreed in cross examination that the Trust enterprises run in concert with his parents farming efforts so that fertilising, spraying, planting and harvesting are done by all the family on both properties.
88.It is the Husband’s evidence that he and his brother, his brother as a (occupation omitted) and he as a (occupation omitted), both have full time jobs and much of the day to day running of the farming properties owned and rented by the Trust is overseen by his father and brother.
89.It is the Father’s evidence that until separation he would work on the farming properties on most Sundays and would take leave during harvest as would his brother to join his father and younger brother who works on the parents’ farm to complete harvesting across all properties.
90.When asked to explain the dramatic increase in the listed expense for hire of plant in 2013/2014 and in the two financial years thereafter, it is the Husband’s evidence that his parents purchased a brand new header at this time and that this figure is the cost of the Trust’s use of that header.
91.It was put to the Husband that this figure was a “paper transaction” only and that in fact no money was paid by the Trust to his parents. The Husband’s evidence is he was sure there were “invoices” but was unable to produce those invoices.
92.It was put to the Husband that the amounts for repairs and maintenance disclosed in the financial statements for the Trust are excessive given his evidence of the small amount of plant and equipment owned by the Trust. It was put to the Husband that the figures represent repairs and maintenance across the entirety of the family farming enterprises including that of his parents.
93.It was also put to the Husband that the high costs of fertiliser and spraying were greatly in excess of that which would be needed for the relatively small acreage owned or leased by the Trust and that figure again included the cost of fertilising and spraying undertaken on his parent’s property.
94.The Husband’s response to this line of questioning was that the figures are all given to the accountant who prepares the taxation returns for the Trust.
95.Whilst the Husband was not directly questioned on this, in his closing submissions the Husband’s Counsel indicated that the figures provided to the accountant to enable him to prepare the Trust’s financial statements and taxation returns are not provided by the Husband.
96.It is submitted on behalf of the Counsel for the Wife that the Wife and her solicitor had considerable difficulty in obtaining the relevant financial information from the Husband and that much of the relevant documentation was only received shortly before the final hearing.
97.It is submitted on behalf of the Wife that the late provision of financial information from the Husband, the lack of specificity in the viva voce evidence given by the Husband about the conduct of and management of the Trust and its finances, that he has not filed an updated Financial Statement and his failure to make all the Trust assets available for valuation should lead the Court to conclude that there has been a failure to disclose by the Husband such that this Court cannot be satisfied that he has provided evidence to support his claim as to the earnings and assets of the Trust.
98.In response to the Wife’s submissions in this regard, it is submitted on behalf of the Husband that the Husband is not an educated man, he is a (occupation omitted) that fixes things. It is submitted the Husband does not prepare the figures for the trust nor provide them to the accountant and that he therefore relies on his accountant and follows his accountant’s advice in relation to how the Trust is managed and the Trust’s financial circumstances.
99.It was submitted on behalf of the Husband that he is not someone who would wilfully mislead the Court and that he answered the questions put to him by Counsel in relation to the financial affairs of the Trust to the best of his ability and in accordance with his knowledge and understanding of how the Trust business is conducted.
100.I am in complete agreement with the submissions put on behalf of the Husband.
101.The Husband and his brother farm, at best, 1000 acres each year. This is not a large holding and will not generate substantial income. This is evidenced by the fact that the Husband and his brother both have full time occupations away from the farm in order to support their families.
102.The relatively small pool of assets available for distribution between the parties is also indicative of the true financial circumstances of the Trust.
103.I found the Husband’s answers to the questions being put to him by the Wife’s Counsel to be honest. This is perhaps best shown by his evidence that he and his brother are not currently trying to expand or grow the Trust and are “just trying to get by”. When the Husband was asked whether this was because of the current proceedings, he answered without hesitation “yes, that is correct.”
104.Accordingly, I am satisfied that there has not been a failure by the Husband to disclose relevant financial information or to wilfully mislead the Court in relation to the income and financial management of the Trust.
Contributions
Has the Husband made a greater contribution than the Wife?
105.It is the Husband’s evidence that during the relationship, in addition to being the primary income earner for the parties, he was required to undertake a large proportion of the homemaking and parenting duties because of the Wife’s shortcomings as a parent, her inability to cope with the children, contain her anger, her obsession with her own appearance and frequent absences from the home.
106.It is further submitted on behalf of the Husband that the Wife expended considerable income during the marriage on her own clothing and appearance. Therefore this expenditure was for her personal benefit and not for the benefit of the family as a whole.
107.The Wife adamantly denies the allegations made against her by the Husband. It is her evidence that the Husband was in full time employment working from 7.30am to 4.30-5.00pm in the evening five days per week as well as working on the Trust farming property every Sunday and for the entirety of the harvest period.
108.It is the evidence of the Wife that during the marriage she was the primary carer of the children as well the person who attended to most of the home duties such as cleaning, washing, cooking and the like.
109.It is the Wife’s evidence that in the last two years of the marriage she was particularly unhappy in the relationship and that she would often leave the matrimonial home after she put the children to bed as she found it difficult to be alone with the Husband.
110.It is the Wife’s evidence that she did not spend large amounts of money on her personal appearance and clothing and that any expenditure by her on these items were within normal bounds. This was particularly so in the last two years of the marriage when she was actually being paid in (omitted) for herself and the Husband by working in her friend Ms K’s (omitted business).
111.It is very clear from the tenor of the Husband’s evidence that he was very hurt by, and remains very bitter about, the circumstances of the parties’ separation.
112.The Husband’s evidence was unrelentingly critical and demeaning of the Wife and he was not able to acknowledge anything positive about her, her parenting or the contributions that she made to the family during their fourteen year relationship.
113.In the context of the contributions made by the parties during the relationship, the evidence of the Wife was fair and objective.
114.Where the parties differ in their evidence of their contributions, I prefer the evidence of the Wife.
115.After the parties separated, the children remained in the primary care of the Husband. This was not the Wife’s choice but something imposed on her by the Husband. There have been some quite serious concerns raised about the Husband exposing the children, and particularly X, to his very negative view of the Wife after separation such that there was a period where X was very reluctant to spend time with the Wife.
116.This post separation history was one of the reasons that the resolution of parenting matters that was achieved between the parties was so pleasing.
117.In all these circumstances I am of the view that the contributions made by the parties during the course of the relationship should be considered equal.
Section 75(2) factors
118.It is the submission of the Wife that there should be an adjustment in her favour for section 75(2) factors. This is because of the Husband’s greater earning capacity both through his employment and the Trust income, the ability of the Trust’s income to be reduced by the merging of the Trust expenses with the expenses of the Husband’s parents’ farm so that the Trust income for tax purposes is minimised, the benefit to the Husband of having some of his personal expenses including petrol and telephone paid by the Trust and the Husband’s financial resource being the Trust’s entitlement to the current crop in the ground.
119.It is submitted on behalf of the Wife that when all these factors are considered there should be an adjustment in her favour for Section 75(2) factors of 15 per cent.
120.There is no doubt that the Husband has a greater earning capacity than the Wife. He earns approximately $66,000 per annum as a (occupation omitted). He also has the benefit of the Trust income.
121.Whilst the Wife’s current income is relatively small, nothing prevents her from returning to an (omitted) role similar to that which she had prior to the birth of the children from which she would earn a greater income. However, even if she could get a job of that type given she has not worked in this area for nearly fifteen years, I am satisfied that she would still not earn at the same level of the Husband.
122.It is apparent from the Husband’s evidence that there is a capacity for the Trust to increase its profitability and that he and his brother will seek to do so once these proceedings are concluded.
123.It is apparent from the Husband’s evidence that, quite legally, the Husband, his brother and parents manage their farming enterprises in such a way as to maximise the tax advantages to all concerned.
124.As such, it is genuinely open for this Court to be satisfied that the Trust operates successfully and to the benefit of all involved.
125.When giving his evidence the Husband confirmed that 2016 had seen good rains and that there is a level of optimism that the 2016 harvest will be a good one. I hope for the Husband, his brother, his parents and all farmers that this proves to be the case.
126.It can be seen from the financial information provided in relation to the Trust it is capable of generating a good income from its crops. Therefore the current crop in the ground must be seen, particularly in 2016, as a financial resource of the Husband.
127.Having considered all these factors, including the parenting orders agreed to by the parties whereby the children now live in a shared care arrangement, I am satisfied there should be an adjustment in the Wife’s favour for section 75(2) factors of ten per cent.
Superannuation
128.The parties are in agreement that there should be a splitting order made to enable the parties’ respective superannuation entitlements to be equalised.
129.Given the contributions made by the parties during the relationship and their relatively young ages, I am satisfied that this is an appropriate order to be made.
130.Based on the parties’ respective superannuation entitlements, this means that a splitting order should be made against the Husband’s superannuation fund in favour of the Wife with a base amount of $33,530. 00
Just and Equitable
131.As can be seen from this judgment I have determined that the parties’ realisable assets shall be divided such that the Wife receives 60 per cent and the Husband receives 40 per cent of same.
132.On the basis of the pool as determined by me, the Husband would need to pay the Wife the sum of $101,925 in order to retain the former matrimonial home and his interest in the Trust.
133.This is not an insubstantial figure given the small property pool and the relatively small equity that is in the real estate owned by the parties and the Trust.
134.In her closing on behalf of the Wife, her Counsel indicated that the Wife was cognisant of the difficulties the Husband may face in raising such an amount. She expressed a willingness to give the Husband some time in order to arrange his financial circumstances so that he could pay her out and retain the former matrimonial home and the Trust.
135.I am of the view that if given sufficient time, the Husband should be able to raise the funds to pay the Wife out without the necessity for him to have to sell either the former matrimonial home or his interest in the Trust. This is particularly so in light of what is expected to be a good return from the 2016 harvest.
136.Accordingly, I intend to make orders that the Husband pay to the Wife the sum of $101,925 within four months of the date of the Orders failing which the former matrimonial home, and if necessary the Husband’s interest in Property S will have to be sold in order for the Wife to receive her share of the matrimonial assets.
137.I note that the parties have agreed that the (omitted) Holiday Investment is to be sold and the proceeds of sale be used to discharge the current level of indebtedness on that investment. It is quite possible that when sold, the holiday investment will not realise sufficient funds to discharge that level of indebtedness. If that should occur both parties will be equally responsible for any shortfall.
138.The Court has been provided with proof of procedural fairness to enable a superannuation splitting order to be made in respect to the equalisation of the parties’ superannuation entitlement and orders will be made to enable that to happen.
139.A payment to the Wife of $101,925 will enable her to reaccommodate herself.
140.I am satisfied that by giving the Husband sufficient time to raise the funds necessary to pay the Wife her share of the matrimonial assets, he will be able to retain the matrimonial home and his interest in the Trust.
141.I am therefore satisfied that the orders proposed by this Court are just and equitable.
I certify that the preceding one hundred and forty one (141) paragraphs are a true copy of the reasons for judgment of Judge Bender
Date: 24 January 2017
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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Equity & Trusts
Legal Concepts
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Remedies
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Injunction
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Constructive Trust
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Costs
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Fiduciary Duty
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