BALFOUR and BALFOUR
[2024] FCWA 48
•29 FEBRUARY 2024
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: BALFOUR and BALFOUR [2024] FCWA 48
CORAM: BERRY J
HEARD: 20-24 FEBRUARY 2023
DELIVERED : 29 FEBRUARY 2024
FILE NO/S: 7188 of 2016
BETWEEN: MS BALFOUR
Applicant
AND
MR BALFOUR
First Respondent
THE BANK
Second Respondent
Catchwords:
FINANCIAL - Where the wife seeks orders that the husband pay her the sum of $3,200,000 within 60 days and in default of payment she be appointed sole trustee for the sale of three parcels of farming land owned by entities under the control of the husband - Where the husband opposes this aspect of the application and seeks orders to pay the wife the sum of $1,000,000 within six months - Where the husband acts as sole director in respect a corporate trustee that he caused to commence proceedings in the Supreme Court of Western Australia against the Second Respondent in February 2018 - Where the marital parties are joint guarantors of loans the subject of the Supreme Court proceedings - Where the Second Respondent filed a defence and joined the wife to the Supreme Court proceedings as Fourth Defendant by counter-claim in her capacity as personal guarantor for the debt owing to the Second Respondent - Where the wife has had no active role in and does not support the prosecution of the Supreme Court proceedings by the husband and his entities - Where the wife seeks orders that the husband be substituted as sole guarantor in respect of the loans made by the Second Respondent and that the Second Respondent remove her as a party to the Supreme Court proceedings - Where debts to the Second Respondent are secured by first registered mortgages over property held by the husband and his entities - Where Court satisfied that the parties' respective contributions should be assessed equally - Where the husband continues to work as a farmer and the wife continues to operate her own building design business - Where the marital parties agree and the Court is satisfied that the husband and his entities should be solely responsible for the ongoing costs, benefits and burdens of the Supreme Court proceedings - Case turns on its own facts
Legislation:
Family Court Rules 2021 (WA)
Family Law Act 1975 (Cth)Category: Reportable
Representation:
Counsel:
Applicant : Mr R Hooper SC First Respondent : Mr M Rynne Second Respondent : Mr J Hedges SC Solicitors:
Applicant : ASB Law First Respondent : KDK Family Law Second Respondent : Corrs Chambers Westgarth Case(s) referred to in decision(s):
AC & VC (2013) FLC 93-540
Candle v Falkner (2021) FLC 94-069
Cook & Langford (2008) FLC 93-374
Elgin v Elgin (2015) 54 Fam LR 31
Jabour & Jabour (2019) FLC 93-898
Kane & Kane (2013) FLC 93-569
Lovine & Connor and Anor (2012) FLC 93-515
Norbis v Norbis (1986) 161 CLR 513
Robb & Robb (1995) FLC 92-555
Russell v Russell (1999) FLC 92-877
Stanford v Stanford (2012) 247 CLR 108
Trevi & Trevi (2018) FLC 93-858
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES' NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
IT IS NOTED that publication of this judgment by this Court under the pseudonym Balfour and Balfour has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 312(b) Family Court Rules 2021 (WA)), or to record a variation to the orders pursuant to r 311 Family Court Rules 2021 (WA).
BERRY J:
Introduction
1The Applicant wife, [Ms Balfour] (''the wife''), and the First Respondent husband, [Mr Balfour] (''the husband''), require the Court to determine a just and equitable adjustment of their property interests. The Second Respondent, [The Bank] (''the Second Respondent''), is a creditor of the husband, the wife, and corporate entities and trusts controlled by the husband, and has an interest in the form of orders that the Court makes.
2The proceedings have been conducted by the marital parties on the common basis that the corporate entities, and in particular the trusts, controlled by the husband should be treated as his property for the purpose of the proceedings pursuant to Section 79 of the Family Law Act 1975 (Cth) (''the Act'').
Family context
3The wife was born in January 1952 and at the date of trial was 71 years of age. The husband was born in February 1948 and at the date of trial was 75 years of age. The marital parties commenced cohabitation in December 1984 and were married on 16 March 1985.
4There are four adult children of the marriage, [Ms A], born in December 1985, [Ms B], born in September 1988, [Mr C], born in November 1990, and [Mr D], born in June 1996. When the marital parties started living together, the wife's son from a prior marriage, [Mr E], born in October 1976, lived with the marital parties. Mr E was eight years of age at the commencement of cohabitation.
5The marital parties gave conflicting affidavit evidence about the date of separation. The wife contended that the marital parties separated on 9 April 2016, when the wife communicated her intention, to the husband, to separate from him.[1] The Court is satisfied that the marital parties did not communicate an intention to separate before this date. In any event, the husband admits the date of separation asserted by the wife in his response to a Notice to Admit Facts administered by the wife, filed on 7 February 2023, in the month prior to trial.
[1] Updating Affidavit of the Applicant wife sworn on 24 January 2023, [58], [64] and [65] (''Wife's Updating Affidavit'').
6At the date of trial, the marital parties were not divorced.
7After the marital parties separated, the husband has had two children with his former partner, [Ms F]. [Child A] was born in January 2020, and [Child B] was born in May 2021. The husband and Ms F are no longer in a domestic relationship.
Orders sought by each party
8The wife and the husband rely upon their respective Minutes of Orders Sought tendered at trial.[2] The Second Respondent opposes any orders which affect the rights conferred upon it by the security documents and guarantees entered into by the marital parties and the corporate entities and trusts controlled by the husband.
[2] Exhibit 3, ''Amended Minute of Orders Sought at trial by the Applicant wife as handed up in Court on 21 February 2023'' (''Exhibit 3''); Exhibit 14, ''Amended Minute of Final Orders Sought by the First Respondent husband as handed up in Court on 22 February 2023'' (''Exhibit 14'').
9In general terms, the wife seeks orders that the husband pay to her within 60 days, the sum of $3,200,000. If the husband fails to pay the sum in the required time, then the wife seeks an order that she be appointed sole trustee for the sale of a portion of [Farm A] comprising three parcels of farming land (but excluding that portion containing the former matrimonial home, and [Lot A]and [Lot B]) (''the sale portion''). Pending payment of the required sum, the wife seeks to restrain the husband by injunction from disposing of, encumbering or further disposing of all or any part of the farmland owned or controlled by the husband. The wife also seeks to cause the husband to charge particular farmland in her favour pending payment of the required sum, so she may lodge a caveat to protect her interest.
10The orders sought by the wife affect the rights of the Second Respondent in at least two material respects.
11First, the wife seeks an order that the husband be substituted as sole guarantor, in lieu of the marital parties as joint guarantors, in respect of loans made by the Second Respondent, which are the subject of pending proceedings in the Supreme Court of Western Australia (''the Supreme Court''). Consequent upon this order, the wife seeks an order that the Second Respondent remove the wife as the Fourth Defendant, by counter-claim, in the pending Supreme Court proceedings, on the basis of there being no order as to costs as between the Second Respondent and the wife. The husband does not oppose orders of this type being made.
12Secondly, on the basis that the husband fails to pay the required sum in the required time, the wife seeks orders affecting the rights of the Second Respondent to control the proceeds of sale of all or any of the sale portion. The husband opposes orders of this type being made. If the husband is required to pay the wife more than $1,000,000, which sum he seeks to pay to the wife within six months, then he seeks leave to rely upon further affidavit evidence from himself, limited to the issue of how he proposes to reconfigure his landholdings to maintain the viability of the farming operation on an ongoing basis, and from his accountant, limited to the taxation consequences (if any) of selling any part of his landholdings to raise the funds necessary to pay the wife and of extracting the funds necessary to pay the wife.
13The wife otherwise seeks orders that each of the marital parties retain that party's own property and any liabilities secured against such property, which in the case of the husband, includes the property and liabilities contained in the corporate entities and trusts under his control. The husband seeks similar orders to the wife in this respect, in addition to the orders that he seeks which have already been mentioned.
Corporate entities and trusts controlled by the husband
14[Mr Balfour Nominees Pty Ltd] (''Mr Balfour Nominees'') was registered on 22 February 1977, and operates as the trustee of the [Balfour Holdings Trust] and the [Mr Balfour Family Trust]. The husband is the sole director. Two of the parties' adult children each hold one ordinary share.[3]
[3] Trial Affidavit of the First Respondent husband sworn on 26 March 2021, [30] (''Husband's Trial Affidavit'').
15Balfour Holdings Trust is a discretionary trust. Pursuant to the Trust Deed dated 1 October 2008, as varied in 2012, Mr Balfour Nominees is the corporate trustee, the husband is an eligible beneficiary, and the husband is the appointor and guardian during his lifetime and, in substitution, if no appointment is made, the children of the husband hold the office of appointor and guardian.[4]
[4] Ibid [30(b)] and [33]; Wife's Updating Affidavit, [42].
16Mr Balfour Family Trust is a discretionary trust. Pursuant to the Trust Deed dated 24 February 1977, as varied in 2000 and in 2015, Mr Balfour Nominees is the corporate trustee, the husband is an eligible beneficiary, and the husband is the appointor and guardian during his lifetime and, in substitution, if no appointment is made, the children of the husband hold the office of appointor and guardian.[5]
[5] Husband's Trial Affidavit, [30(a)] and [32].
17[Company A] was registered on 31 May 1973. The husband is the sole director. The husband holds 200 ordinary shares, and Mr Balfour Nominees holds 2,000 ordinary shares, as trustee for the Mr Balfour Family Trust.[6]
[6] Ibid [30(c)] and [31].
Supreme Court of Western Australia proceedings
18On 28 February 2018, Mr Balfour Nominees started proceedings in the Supreme Court of Western Australia against the Second Respondent, bearing number [redacted] (''the Supreme Court proceedings''). Mr Balfour Nominees alleged that the Second Respondent had charged interest at a higher rate than was agreed between the parties in a number of term facility agreements and trading limit facilities. Allegations were also made about unjust enrichment and misleading and deceptive conduct.[7]
[7] Ibid [148].
19The Second Respondent filed the defence and counter-claim in May 2018. By its defence, the Second Respondent denied all of the allegations. By counter-claim, the Second Respondent added Company A as the Second Defendant, the husband as the Third Defendant, and the wife as the Fourth Defendant.
20The wife was added as the Fourth Defendant in her capacity as personal guarantor for the debt owing to the Second Respondent.[8]
[8] Trial Affidavit of the Applicant wife sworn on 13 October 2020, [115] (''Wife's Trial Affidavit'').
21On 4 April 2016, the wife sent a Notice of Discontinuance of future liability under the guarantee to the Second Respondent and requested that she be released from her ongoing liability as a guarantor. The Second Respondent accepted the notice. The wife's liability under the guarantee at this time was $4,144,188.17.[9]
[9] Wife's Trial Affidavit, [27]-[28].
22The husband caused Mr Balfour Nominees to commence the Supreme Court proceedings without reference to the wife. The husband did not immediately disclose the existence of the Supreme Court proceedings in this Court. The wife has played no active role in, and does not support the prosecution of, the Supreme Court proceedings.
23At trial, the Supreme Court proceedings were not yet listed for trial and remained pending.
Composition of the evidence
24The wife relies upon her trial affidavit filed on 13 October 2020, her financial statement filed on 23 January 2023, and her updated trial affidavit filed on 24 January 2023.[10] The husband relies upon his trial affidavit and financial statement, each filed on 26 March 2021, together with his further financial statement and updated trial affidavit, each filed on 24 January 2023.[11]
[10] Papers for the Judicial Officer filed by the Applicant wife on 14 February 2023, electronic pages 2-3 of 23 (''Wife's Papers for the Judicial Officer'').
[11] Revised Papers for the Judicial Officer filed by the First Respondent husband on 20 February 2023, electronic page 12 of 28 (''Husband's Papers for the Judicial Officer'').
25The wife also relies upon two affidavits filed by [Mr G] (rural property valuer) filed on 18 June 2021 and 17 February 2023, and affidavits filed by [Ms H] (accountant) and Mr E (the wife's son from a prior marriage), filed on 24 January 2023 and 30 January 2023, respectively.
26The Second Respondent relies upon the affidavit of [Mr I] filed on 1 February 2023.
27During the trial, the Court received a number of exhibits, including Single Expert Witness reports.
Observations of the parties and their witnesses
28The Court makes the following observations about the parties and their witnesses.
Ms Balfour
29The wife was extensively cross-examined and gave her evidence in a frank and forthright manner.
Ms H
30Ms Hwas not required for cross-examination and her evidence is accepted.
Mr E
31Mr E was not required for cross-examination and his evidence is accepted.
Mr G
32Mr G was not required for cross-examination and his evidence is accepted. Mr G has published four reports.[12]
[12] Affidavit of the Single Expert Witness (Valuer) affirmed on 17 June 2021, Annexure ''RL1'', ''Single Expert Report for the property located at [Rural Block A], dated 3 March 2021'', electronic pages 5-205 of 356 (''First Single Expert Report''), and Annexure ''RL2'', ''Single Expert Report for the property located at [Lot C], dated 4 March 2021'', electronic pages 206‑356 of 356 (''Second Single Expert Report''); Affidavit of the Single Expert Witness (Valuer) affirmed on 16 February 2023, Annexure ''2'', ''Single Expert Valuation Report for [Farm A] property dated 23 January 2023'', electronic pages 11-107 of 168 (''Third Single Expert Report''), and Annexure ''3'', ''Single Expert Valuation Report for [Farm B] dated 24 January 2023'', electronic pages 108-168 of 168 (''Fourth Single Expert Report'').
Mr Balfour
33The husband was extensively cross-examined. Aspects of his evidence were disorganised and unsatisfactory, for example, late disclosure of relevant documents and the omission of relevant disclosure schedules, when previous solicitors represented him, from his undertaking as to disclosure.
34The husband commenced Supreme Court proceedings on 28 February 2018, which he did not disclose to the wife until 11 April 2018. The Deed of Forbearance dated 3 October 2017, discussed later in these reasons, lapsed on 28 February 2018.[13]
[13] Wife's Updating Affidavit, [72(c)] and [73(b)].
Mr J
35[Mr J] is the Legal Practice Director of [Law Firm A]. This firm acts for the husband in his personal capacity, and in his capacity as director of both Mr Balfour Nominees and Company A, in the Supreme Court proceedings. Mr J has had the conduct of the Supreme Court proceedings for the husband, Mr Balfour Nominees, and Company A, since their inception.
36The parties to the Supreme Court proceedings are as follows:
(1)the Plaintiff is Mr Balfour Nominees in its own capacity, as trustee for the Balfour Holdings Trust and as trustee for the Mr Balfour Family Trust (Mr Balfour Nominees is also the First Defendant, by counter-claim);
(2)the Defendant is The Bank, who is the Second Respondent in these proceedings in the Family Court of Western Australia (The Bank is also the Plaintiff, by counter‑claim);
(3)Company A is the Second Defendant, by counter-claim;
(4)the husband is the Third Defendant, by counter-claim; and
(5)the wife is the Fourth Defendant, by counter-claim.
37On 28 February 2018, Mr Balfour Nominees commenced the Supreme Court proceedings against The Bank.
38Mr J deposes that, through Mr Balfour Nominees, the husband's case in the Supreme Court proceedings has two primary limbs:[14]
(1)the claim that The Bank charged the husband a higher rate of interest than what they said that they would charge pursuant to the loan contracts between them (''the overcharged interest limb''); and
(2)the further claim that if claim (1) above is proven, then the opportunity cost of paying the overcharged interest resulted in damages and loss of earnings for the farming operations carried out by the Balfour Holdings Trust and the Mr Balfour Family Trust (''the opportunity cost limb'').
[14] Affidavit of Mr J sworn on 16 February 2023, [6] (''Mr J's Affidavit'').
39Mr J deposes that the sum asserted by the Second Respondent to be owed under the loan facilities, of $2,327,666.91 as at 31 January 2023, includes the legal costs charged to the Second Respondent by its solicitors acting in the Supreme Court proceedings and, possibly, the Family Court proceedings.[15] Mr I, Manager of Asset Management at The Bank, did not give evidence in his trial affidavit, and was not cross-examined, as to whether this outstanding sum owed at 31 January 2023 did include any paid legal costs of the Second Respondent.
[15] Ibid [8].
40The loan facilities are held by the Balfour Holdings Trust.
41Senior Counsel for the Second Respondent acknowledged that, although the loan facilities are held by the Balfour Holdings Trust, the Second Respondent holds security for the loan facilities, by way of mortgages registered over the Farm A (which is owned by the Mr Balfour Family Trust), valued at $7,100,000 in these proceedings, and also over the farming property in [Rural Town B], Western Australia (which is owned by Company A) (''Farm B''), valued a $2,500,000 in these proceedings. The Second Respondent also holds personal guarantees for the loan facilities given by each of the husband and the wife.
42Mr J deposes that, based upon calculations undertaken by a third party for the purpose of the Supreme Court proceedings, if the husband's case is successful on the overcharged interest limb only, then it is likely that the total debt to the Second Respondent would be extinguished, ignoring any calculations for costs and the like.[16]
[16] Ibid [10].
43Mr J further deposes that, if the Second Respondent is successful in its counter-claim, then he would ''assume that [Mr Balfour Nominees], [Company A], [Mr Balfour] and [Ms Balfour] would be liable to pay to [The Bank] whatever sum is lawfully owed''.[17]
[17] Ibid [11].
44Mr J gave evidence and was cross-examined on 23 February 2023. At that time, the advice of counsel had not been obtained since July 2018. Mr J said that the husband's case was arguable, and that no estimates of trial costs had yet been provided. Expert evidence was shortly due to be filed on behalf of the husband, Company A and Mr Balfour Nominees, and any responsive evidence from the Second Respondent must have been considered. The case would then be entered for trial, however the trial date or approximate trial date could not be identified.
Mr I
45Mr I is the Manager of the Asset Management Section of The Bank, the Second Respondent in these proceedings. He has had the conduct of the marital parties' accounts since 2016. Mr I filed an affidavit on 1 February 2023, on behalf of the Second Respondent, to which he annexed a certificate dated 1 February 2023. He deposed that the amount payable to the Second Respondent as at 31 January 2023 under the loan agreement (as defined) and under the mortgages (as defined) is $2,327,666.91, broken down as follows:[18]
(1)Term Loan Facility: $507,177.75
(2)Trading Limit Facility: $1,820,489.16
[18] Affidavit of Mr I sworn on 1 February 2023 (''Mr I's Affidavit''), Annexure ''[MI]-1'', ''Certificate dated 1 February 2023'', electronic pages 5-9 of 9; electronic page 9 of 9.
46Interest was being charged on the Term Loan Facility at the rate of $139.87 per day, and on the Trading Limit Facility at the rate of $748.76 per day, a total of $888.63 per day.[19]
[19] Ibid.
47The Court accepts the affidavit evidence of Mr I, which was unchallenged in cross-examination. None of the evidence given by Mr I on other issues was challenged, and the Court accepts his oral evidence.
Outline of relevant legal principles
48The Court must identify the existing legal and equitable interests of the marital parties in the property, which each owns individually and jointly, pursuant to Section 79(1) of the Act. The marital parties are not entitled to assume that their respective interests in property are, or should, be different from those that exist at law and equity. The Court is not permitted to simply consider the statutory considerations set out in Section 79(4) and make orders altering property interests. Prior to embarking on this exercise, the Court must consider whether it is just and equitable to make any order altering property interests, pursuant to Section 79(2).[20]
[20] The propositions in this paragraph are drawn from Stanford v Stanford (2012) 247 CLR 108 (''Stanford v Stanford'').
49After satisfying itself of the matters referred to in Sections 79(1) and 79(2) of the Act, the Court must consider the matters set out in Section 79(4). These matters fall into two categories. First, the identification and evaluation of relevant contributions to property (including property which is no longer presently owned by the marital parties or either of them), pursuant to Sections 79(4)(a) and (b), and to the welfare of the family (including as homemaker and parent), pursuant to Section 79(4)(c), from the commencement of cohabitation until trial. Secondly, the identification and evaluation of other adjustment factors, pursuant to Sections 79(4)(d), (e), (f) and (g) of the Act.
50While it is common for the Court to evaluate either or both of the two broad categories of considerations in Section 79(4) in percentage terms, this is not a statutory requirement.[21] Also, the Court may identify and evaluate contributions using a global or asset-by-asset approach, and neither approach should yield a more just and equitable outcome than the other.[22]
[21] Cook & Langford (2008) FLC 93-374 at 82,608 [3]; Kane & Kane (2013) FLC 93-569 at 87,640 [3].
[22] Norbis v Norbis (1986) 161 CLR 513 at 524, 533-534 and 541.
51Relevant financial conduct or financial behaviour of the parties, including in respect of the use of property after separation which no longer exists, can be taken into account under Section 79(4) in a number of ways, including as a notional asset in the divisible asset pool, assessing contributions and considering other adjustment factors.[23]
[23] Lovine & Connor and Anor (2012) FLC 93-515 at 86,603 [96] and 86,604 [100]-[103] (''Lovine & Connor and Anor''); Candle v Falkner (2021) FLC 94‑069 at 81,086-81,088 [52]-[58].
52Considerations of justice and equity may require a sharing of any legitimate and reasonable net realisation cost or net liability (including a taxation liability) incurred by one party, for the purpose of paying the other party a cash entitlement pursuant to the Court's orders.[24]
[24] Lovine & Connor and Anor at [122]; Elgin v Elgin (2015) 54 Fam LR 31 at 81-83 [277]-[278].
53Lastly, the Court must revisit Section 79(2) and ensure that the form and content of any orders which it makes are just and equitable. In this respect, Section 79(2) has a dual aspect. First, in determining whether it is appropriate, just and equitable to make any order at all, and secondly, ensuring that any order actually made is appropriate, just and equitable, in form, content and effect.[25]
[25] Stanford v Stanford; Russell v Russell (1999) FLC 92-877 at 86,439 [80].
54Under the statutory conditions prescribed by Part VIIIAA of the Act, the Court may make orders pursuant to Section 79 which are directed to, or alter, the rights, liabilities, or property interests of a third party.[26] The wife relies upon Section 90AE in relation to the orders that she seeks against the Second Respondent. The application of this provision will be considered later in these reasons.
[26] Family Law Act 1975 (Cth) s 90AA.
Existing legal and equitable interests in property - Section 79(1)
55The Court finds that the existing legal and equitable interests in property held by the marital parties around the date of trial may be summarised as follows, with reference to the joint property schedule tendered at trial (contained in the Schedule to these reasons):[27]
A.Wife: $3,363,868
B.Husband: $145,870
C.Balfour Holdings Trust: -($1,774,306)
D.Mr Balfour Family Trust: $7,157,120
E.Company A: $2,491,279
F.[Partnership A]: $3,589
[27] Exhibit 4, ''Updated joint property schedule dated 21 February 2023'' (''Exhibit 4'').
56On this basis, the net asset pool is worth $11,387,420.
57The Court makes the following findings in relation to each category, which resolve the differences between the marital parties, with reference to the joint property schedule tendered at trial. During closing submissions, the marital parties made concessions or did not pursue other points which otherwise appear in the joint property schedule and are not addressed below.
Category A: The wife
58The only difference between the marital parties lay in the value of the wife's personal effects. In closing submissions, the husband properly conceded that the Court could adopt the wife's value, given the state of the evidence.[28]
[28] Written Closing Submissions filed by the First Respondent husband on 20 March 2023, electronic page 16 of 18 [105] (''Husband's Written Closing Submissions'').
59The wife submits that the inheritance from her mother, represented in two bank accounts in the total sum of $942,889 should be treated in a separate asset pool, on the basis that the husband has made no contribution to its acquisition, conservation or improvement.[29] The Court declines to create a separate asset pool for the wife's inheritance but will consider her submissions about contributions to the inheritance, later in these reasons.
[29] Written Closing Submissions filed by the Applicant wife on 11 April 2023, electronic page 21 of 30 [109] (''Wife's Written Closing Submissions''); Exhibit 4, electronic page 1 of 4.
Category B: The husband
60Based upon the joint property schedule, the only difference between the marital parties lay in a modest sum contained in the husband's solicitors trust account. The Court prefers the husband's evidence in respect of this amount.
61Under cross-examination, the husband conceded that he retained some of the 527 [Company C] shares which he previously asserted had been sold. In relation to the values of the 1981 and 1982 motor vehicles, the Court accepts the husband's evidence that he disposed of one vehicle, and the other vehicle has no commercial value. In relation to these Company C shares and motor vehicles, the Court is satisfied that its findings about value are not material to the outcome of these proceedings.
Category C: Balfour Holdings Trust
62The marital parties have a common basis for their disagreement about the value to be allocated to plant and equipment, as well as to sheep and livestock. The wife adopts historical valuations from 2019, while the husband adopts current market values.[30] The Court proposes to include these assets at their current value for trial. The Court will later consider the wife's arguments about the husband's historical retention of these items as a partial property distribution.
[30] Exhibit 2, ''Valuations from All Asset Appraisals dated 20 February 2023'' (''Exhibit 2'').
63The Court prefers the husband's evidence about the [Company B] loan and does not propose to include its book value as an asset of this entity.
64There is no basis on which to ignore the liability for unpaid superannuation owed to third parties, in respect of which the quantum is agreed.
65The Court does not propose to include the [Company D] shares at their book value but prefers the husband's evidence that they are of no commercial value.
66The Court finds that the Shire of Rural Town A fine, of $7,150, is a legitimate liability of the entity. The Court will later consider the wife's arguments about the husband's conduct in incurring the liability.[31]
[31] Exhibit 4, electronic page 2 of 4; Husband's Written Closing Submissions, electronic page 16 of 18 [106]; Wife's Written Closing Submissions, electronic page 11 of 30.
67The liability owed to the Second Respondent, as close as practicable to trial, is established by the evidence of Mr I, in particular by the certificate annexed to his trial affidavit, which fixes the liability at 31 January 2023. The Court will include the liability in the total sum of $2,327,667.[32]
[32] Mr I's Affidavit, Annexure ''[MI]-1'', ''Certificate dated 1 February 2023'', electronic page 9 of 9.
Category D: Mr Balfour Family Trust
68The Court will include the plant and equipment at current value, for reasons earlier given in respect of this category of asset.[33]
[33] Exhibit 2.
69The Court does not accept the book value of the Company B shares and prefers the husband's evidence that they are of no commercial value.
Category E: Company A
70The marital parties agreed the value of the assets in this entity.
Category F: Partnership A
71The Court will include the plant and equipment at current value, for reasons earlier given in respect of this category of asset.[34]
[34] Exhibit 2.
Paid legal fees
72At the date of trial, the husband had paid $405,425 and the wife had paid $395,660 in family law legal fees.[35] The Court will later consider whether any add-back or other adjustment should be made on account of these payments.
[35] Exhibit 4, electronic page 4 of 4.
Whether just and equitable to make orders altering property interests - Section 79(2)
73Both marital parties are seeking orders which effect alteration of property interests. One primary difference between the marital parties is the cash sum which the husband is required to pay the wife, $3,200,000 (as sought by the wife), or $1,000,000 (as sought by the husband). When the Court considers the form of orders which are required to be made, consideration will be given to whether the interests of the Second Respondent are reasonably required to be affected.
Contributions - Sections 79(4)(a), (b) and (c)
74The Court proposes to consider contributions to property and contributions to the welfare of the family, from the commencement of cohabitation until trial.
Contributions to property - Sections 79(4)(a) and (b)
75At the commencement of cohabitation, the wife owned the [Suburb A] property, which she stills holds (''the Suburb A property''). Upon commencement of cohabitation, the wife moved to Rural Town A to live with the husband. She leased the Suburb A property, and the rental income was sufficient to cover the mortgage payments. The Suburb A property was rented until around 2006, when the marital parties' children moved there to attend university.[36]
[36] Wife's Trial Affidavit, [11] and [42]-[43].
76Shortly after the commencement of cohabitation, the wife was made a director of Company A and Mr Balfour Nominees. The wife assumed primary responsibility for the administrative side of the farming business, which required office work dealing with the business activity statements, superannuation, and liaising with the banks and the accountant.[37]
[37] Ibid [44]-[46].
77The husband is a third-generation farmer of crops and livestock. When the parties commenced cohabitation, he was farming approximately 12,000 acres of farmland in Rural Town A, Rural Town B and [Rural Town C], Western Australia.[38]
[38] Husband's Trial Affidavit, [9].
78The land at Rural Town C was operated by the [Partnership B], a partnership between respective family trusts operated by the husband and his brother. This partnership ceased in around 1988. Company A then became the registered proprietor of the land on 31 January 1989, paying the purchase price of $650,000, financed by bank debt.[39]
[39] Ibid [45] and [58(a)].
79In 1995, Mr Balfour Nominees became the registered proprietor of a further parcel of land, adjacent to the existing Rural Town C property. The purchase price was $750,000, financed by bank debt.[40]
[40] Ibid [58(b)].
80All of the Rural Town C land was sold in 2013, 2014 and 2019, to pay down the debt owed to the Second Respondent. The husband continues to farm approximately 5,000 acres of land.[41]
[41] Ibid [9]; Wife's Trial Affidavit, [79].
81In 1995, the husband was involved in the incorporation of Company B. [Company B's original name was taken from the purpose of the research the entity was engaged in]. The company was engaged in research to speed up the process of supplying (that is, catching, tipping and dragging) sheep across multi-stations in a mechanised manner. Since that time, the husband and third parties have invested in the company to enable further research to be undertaken.[42] However, the Court accepts the husband's evidence that the existing prototypes have design faults and are not commercially viable.[43] While some modest expenditure was paid to a patent attorney and an engineering company in 2021, the Court is satisfied that the husband's interest in the company has no commercial value, for the following reasons:[44]
(1)Mr Balfour Nominees holds a little over 52 percent of the ordinary shares, and around 54.5 percent of the redeemable preference shares, in the company;
(2)the carried-forward tax losses in the company, as at 30 June 2021, amount to $430,094; and
(3)$419,210 of these losses were incurred in or before the 2017 financial year.
[42] Husband's Trial Affidavit, [64]-[66].
[43] Ibid [34].
[44] Exhibit 25, ''Fourth Bundle of cross-examination documents tendered by the Applicant wife on 23 February 2023'' (''Exhibit 25''), electronic pages 19-35 of 46, ''Financial Statement in respect of Company B for the year ended 30 June 2021'', electronic pages 33-34 of 46.
82In December 2004, the wife acquired her [Suburb B] property (''the Suburb B property'') with income from her business design work. The wife purchased this property so that the children would have accommodation in Perth while attending university.[45]
[45] Wife's Trial Affidavit, [70].
83Between May 2005 and September or October 2011, the wife's son, Mr E, and his wife, moved onto Farm A to assist with the running of the farming business. Mr E left the business to work on a fly‑in, fly-out basis.[46]
[46] Ibid [73].
84In around 2006, the husband's mother passed away. Thereafter, the Partnership A ceased operation, and its assets were transferred into the Balfour Holdings Trust. Upon the passing of his mother, the husband received 100 shares held by her, and 100 shares held by his late father, in Company A.[47]
[47] Husband's Trial Affidavit, [71]-[72].
85On 17 September 2009, the wife provided the Second Respondent with an unlimited guarantee and indemnity, in relation to the obligations of Mr Balfour Nominees in its own capacity and as trustee of the Balfour Holdings Trust (referred to as the Borrower in the Deed of Forbearance dated 3 October 2017, referred to below).[48]
[48] Wife's Updating Affidavit, Annexure ''9'', electronic pages 44-68 of 68, ''Deed of Forbearance dated 3 October 2017''; electronic page 49 of 68 (''Deed of Forbearance'').
86In 2013, the wife relocated her primary residence to Perth, but would return to the former matrimonial home in Rural Block A, from time to time. The wife says that, in 2012, she handed over administrative duties of the farming business to the husband, because he would not cooperate with her in any way. After around 12 months, the husband asked the wife to resume responsibility for the monthly accounts, which she agreed to do. The wife also paid superannuation and prepared group certificates. She helped formulate yearly budgets and says that she cannot recall any year when the budget was met.[49]
[49] Wife's Trial Affidavit, [76]-[78].
87The wife worked in Perth for a building company from April 2013 until January 2020, when she was made redundant. During this time, the wife would return to Farm A each weekend, and she continued cleaning, cooking, gardening and washing.[50]
[50] Ibid [77]-[78].
88When the first parcel of land at Rural Town C was sold in 2013 and 2014, Capital Gains Tax was incurred.[51]
[51] Ibid [79].
89Mr C returned to work on the farm in 2014 and left on 1 March 2016.[52]
[52] Ibid.
90In May 2015, the marital parties were advised by the Second Respondent that strict conditions would apply for the financing of farming operations for the next 12 months, including for the sale of one half of the Rural Town C land. The husband unsuccessfully sought to refinance the Second Respondent's loans with six other lenders.[53]
[53] Ibid [81].
91In October 2015, the Second Respondent obtained valuations for the Rural Town C properties in the sum of $3,415,000.[54] All of the farmland (including the balance of the Rural Town C property which had not then been sold) was valued around that time for $7,300,000.[55]
[54] Ibid [87]
[55] Exhibit 17, ''Copy of paragraph 51 of the Applicant wife's affidavit sworn on 21 November 2016 and filed on 23 November 2019, together with Annexure [MB]9'' (''Exhibit 17''), electronic page 1 of 9.
92On 4 April 2016, the wife gave notice of discontinuance of future liability under her guarantee obligations to the Second Respondent. At this time, the wife's liability under the guarantee was fixed at $4,144,188.[56]
[56] Wife's Trial Affidavit, [88].
93In May 2016, the parties obtained a valuation of Farm A at $3,150,000, and Farm B at $720,000.[57]
[57] Husband's Trial Affidavit, [19].
94The wife started these proceedings on 23 November 2016.
95On 16 February 2017, the Second Respondent issued Notices of Demand requiring repayment of all outstanding debt. In March 2017, the wife agreed that the husband be permitted to refinance the debt with the bank using all available properties. However, the husband was unable to refinance the debt.[58]
[58] Ibid [130]-[131].
96At trial, the remaining farmlands were held on several titles around Rural Town A and Rural Town B, Western Australia.
97Company A became the registered proprietor of several land titles forming part of Farm A, on 17 September 1973. Prior to 17 September 1973, this land was held personally by the husband's father.[59] The land titles held by Company A are as follows:[60]
[59] Wife's Updating Affidavit, Annexure ''6'', electronic pages 35-38 of 68, ''Transfer of Land dated 17 September 1973''.
[60] As defined in Exhibit 3.
R. ''Parcel 1 of [Farm A]'' is the real property in the State of Western Australia held in the name of [Company A], comprising of:
a.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
b.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
c.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
d.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
e.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
f.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
g.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted]; and
h.Lot [redacted] & LOT [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted] (Multi Lots).
S. ''Parcel 2 of the [Farm A]'' is the real property located in the State of Western Australia held in the name of [Company A], comprising of:
a.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
b.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
c.Multi Lot Title contained on Certificate of Title Volume [redacted] Folio [redacted]:
i. Lot [redacted] on Deposited Plan [redacted];
ii. Lot [redacted] on Deposited Plan [redacted];
iii. Lot [redacted] on Deposited Plan [redacted];
iv. Lot [redacted] on Deposited Plan [redacted]; and
v. Lot [redacted] on Deposited Plan [redacted].
(As per original)
98The balance of Farm A is held by Mr Balfour Nominees as trustee for the Mr Balfour Family Trust. Mr Balfour Nominees became the registered proprietor of the following titles on 17 May 1985:[61]
[61] Ibid; Exhibit 30, ''Transfer of Land dated 26 April 1985'' (''Exhibit 30'').
T. ''Parcel 3 of the [Farm A]'' is the real property located in the State of Western Australia held in the name of [Mr Balfour Nominees Pty Ltd] as Trustee for the [Mr Balfour Family Trust], comprising of:
a.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
b.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
c.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
d.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
e.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
f.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
g.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
h.Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
i.Multi Lot Title contained on Certificate of Title Volume [redacted] Folio [redacted]:
i. Lot [redacted] on Deposited Plan [redacted]; and
ii. Lot [redacted] on Deposited Plan [redacted].
(As per original)
99Two further parcels of land, forming part of and being contiguous to Farm A, were acquired by Mr Balfour Nominees as registered proprietor (as trustee for the Mr Balfour Family Trust) on 17 February 2004 (Lot B) and on 19 November 2007 (Lot A).[62] Lot B was approximately 140 acres of vacant paddock and was purchased for approximately $150,000, funded by way of bank loan. Lot Awas approximately eight acres of gravel pit and was purchased for approximately $80,000, funded by way of bank loan.[63] The title details for these two parcels are as follows:[64]
U. ''[Lot A]'' is the real property located in the State of Western Australia, being [Lot A] on Diagram [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted], held in the name of [Mr Balfour Nominees Pty Ltd] as trustee for the [Mr Balfour Family Trust].
V. ''[Lot B]'' is the real property located in the State of Western Australia, being [Lot B] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted], held in the name of [Mr Balfour Nominees Pty Ltd] as trustee for the [Mr Balfour Family Trust].
(As per original)
[62] Exhibit 10, ''Bundle of Title searches together with an aide memoire of the First Respondent husband'', electronic pages 4-5 of 91.
[63] Husband's Trial Affidavit, [58(c)] and [58(d)].
[64] As defined in Exhibit 3.
100Farm B is held on one land title and was registered in the name of Company A on 17 August 1977.[65]
[65] Wife's Updating Affidavit, Annexure ''7'', electronic pages 39-68 of 68, ''Transfer of Land dated 17 August 1977''.
101The wife applied to sell the Rural Town C property in May 2017 and the Court ultimately made these orders on 18 January 2019.
102Further demands were issued, pending the parties and associated entities signing a Deed of Forbearance.
103A Deed of Forbearance dated 3 October 2017 was entered into between the marital parties, the Second Respondent, Mr Balfour Nominees in its own capacity and as trustee for the Balfour Holdings Trust, Mr Balfour Nominees in its own capacity and as trustee for the Mr Balfour Family Trust, and Company A. The salient terms are as follows:[66]
(1)as at 7 July 2017, the debt owing on the account ending in #[redacted] (''the trading limit facility'') was $1,177,715.99, and the debt owing on the account ending in #[redacted] (''the term loan facility'') was $3,073,936.33 [a total then owing of $4,251,652];
(2)the debt is secured by first registered mortgages over property held by Mr Balfour Nominees (several titles), Company A (several titles), and the husband (one title, being part of the Rural Town C land; Lot [redacted] on Deposited Plan [redacted] in Certificate of Title Volume [redacted] Folio [redacted]), livestock mortgages over all livestock, all present and after acquired property of Mr Balfour Nominees in all its capacities by way of a fixed and floating deed of charge, present and after acquired property of Company A by way of a fixed and floating deed of charge;
(3)on or before 28 February 2018, the husband must provide the Second Respondent and the wife with an unconditional offer, in a form acceptable to the Second Respondent, to refinance the debt in full by a third-party financier, or for the sale of the Rural Town C property (in whole or part) and to refinance any debt remaining after payment of the net proceeds of sale of Rural Town C by a third-party financier;
(4)the parties must strictly comply with the repayment date extension of each facility to 28 February 2018;
(5)the trading limit facility is $1,360,000 until 31 December 2017, reduced to $1,200,000 from 1 January 2018 until the repayment date; and
(6)the term loan facility limit is $3,070,000 until the repayment date.
[66] Deed of Forbearance, electronic pages 50-63 of 68.
104The husband failed to comply with his obligations under the Deed of Forbearance. The Supreme Court proceedings remain unresolved, and the husband's prospects of success are uncertain, but arguable.
105Upon the sale of the balance of the Rural Town C property for $3,767,018 in May 2019, the total sum owing to the Second Respondent was $1,444,626, plus costs.[67] Around this time, in February 2019, the plant and equipment under the husband's control was valued at $428,900, and the livestock under his control was valued at $547,770, a total value of $976,670.[68] The wife contends that both categories of assets have been devalued or depreciated by the husband by the trial date, with both categories of assets now worth $647,290, a reduction in value of $329,380. The wife sought that these two categories of assets be sold, by her application filed in July 2018, which was resisted by the husband.
[67] Wife's Trial Affidavit, [29].
[68] Ibid Annexure ''3'', electronic pages 29-50 of 50, ''All Asset Appraisal Valuation Report dated 11 April 2019'', electronic page 33 of 50.
106On 7 October 2019, the Second Respondent asserted, in an amended counter-claim filed in the Supreme Court proceedings, that the amounts owing were $941,020 under the trading limit facility, and $503,605 under the term loan facility, a total value of $1,444,625.[69]
[69] Wife's Trial Affidavit, [157].
107In March 2021, the Single Expert Witness valued Farm A at $5,450,000, and Farm B at $1,020,000.[70]
[70] First Single Expert Report, electronic page 124 of 356; Second Single Expert Report, electronic page 310 of 356.
108In July 2021, the wife's mother passed away. The wife's father passed away in January 2019, leaving his estate to the wife's mother. The wife received a total inheritance from her mother of $941,860. These funds are retained in two bank accounts in her name.[71]
[71] Wife's Updating Affidavit, [17(a)]-[17(f)].
109In February 2023, Farm A was valued at $7,100,000, and the Farm B was valued at $2,500,000.[72]
[72] Third Single Expert Report, electronic page 61 of 168; Fourth Single Expert Report, electronic page 150 of 168.
Contributions to the welfare of the family - Section 79(4)(c)
110The husband acknowledges that throughout the course of the relationship, the wife was the primary carer of the children, and homemaker of the matrimonial home. The wife was primarily responsible for cooking, washing, cleaning and attending to the gardens. The wife was responsible for taking the children to their respective sports events. The marital parties also employed people during the relationship to assist with domestic tasks.[73]
[73] Husband's Trial Affidavit, [92]-[94].
111Mr D attended boarding school in Perth from about 2009. The older children took up tertiary studies in Perth, and while studying, spent periods of time living in the Suburb B or Suburb A properties.[74]
[74] Ibid [96].
112In respect of food consumption in the household, the husband was responsible for slaughtering animals and the butchery work. The husband cut up the wood for the fireplaces, and also assisted the children during dinner time. The parties shared grocery shopping. The husband was responsible for maintaining the properties. The husband spent time with the children on the farm and taught them aspects of farming, particularly after school, on weekends, and during school holidays. [75]
[75] Ibid [97]-[98].
113The husband's ''contributions'' towards Mr E will be discussed later in these reasons.[76]
[76] Robb & Robb (1995) FLC 92-555 at 81,547.
Conclusion on contributions
114Upon a holistic consideration, and reflection upon the evidence, the Court is satisfied that the marital parties' contributions, in all forms, from the commencement of cohabitation until trial, should be assessed equally. The principal considerations in undertaking such an assessment are as follows:
1.The husband (including through his entities) made significant contributions by the acquisition, prior to the commencement of cohabitation, of a large portion of the farmlands which existed at trial. The conservation and improvement of those farmlands, to which both marital parties made significant contributions, could not have occurred without their prior acquisition by, or on behalf of, the husband. The significant increase in value of those farmlands could not have occurred without a combination of the husband's initial contribution of acquisition, and the marital parties' joint contribution of conservation and improvement.
2.The farmlands in 2015 and 2016 were valued at $7,300,000; at trial (minus the second part of the Rural Town C properties, which were sold in 2019), they were valued at $11,600,000.
3.The debt owed to the Second Respondent has increased since the sale of the second part of the Rural Town C properties, until trial.
4.The husband has enjoyed the benefit of livestock, plant and equipment, which has reduced in value by almost $330,000, from early 2019 until the date of trial.
5.The wife made a significant contribution to the conservation and improvement of the farmlands, by providing a guarantee to the Second Respondent in 2009, for its loans.
6.Both marital parties made significant contributions to the welfare of the family, although the wife made greater contributions in this respect.
7.The wife acquired the Suburb A property prior to the commencement of cohabitation, and the Suburb B property during the marriage. Both properties have increased in value during the marriage. The wife has maintained these properties from her personal exertions and income.
8.The wife received an inheritance of $942,889 following the passing of her mother in 2021, six years after separation, which she acquired, conserved, and maintained, without any relevant contribution from the husband.
9.The wife has made a significant indirect contribution to the husband's paid legal fees.
10.The husband's investment of time and funds in Company B has not yielded a valuable financial product, as at the trial date, but cannot be characterised as conduct which is reckless, negligent or wanton, or conduct designed to maximise or reduce the effective value or worth of matrimonial assets.
11.Over a period of cohabitation spanning 31 years, and a post‑separation period just short of seven years as at the date of trial, each of the marital parties made a myriad of contributions to property which currently exists, and which no longer exists, and contributions to the welfare of the family; such contributions are not required to be measured in terms of each party's causal connection to a particular asset, or the value of a ''financial product'' attributed to one party, rather the Court must assess the entirety of the contributions holistically, and somehow allocate a reasonable value to all of the elements making up the entirety of the marriage relationship.[77]
[77] See, generally, Jabour & Jabour (2019) FLC 93-898, and the cases cited therein.
115Based upon an assessment of equal contributions from the commencement of cohabitation until trial, each of the marital parties is entitled to property worth $5,693,710.
Other adjustment factors - Sections 79(4)(d), (e), (f) and (g)
Effect of proposed order upon earning capacity of either [marital] party
116The Court intends to make orders which may impact upon the husband's earning capacity. The husband's gross personal income in recent years, ignoring the tax losses against which it is offset, has been nominal. However, if any farmland is required to be sold to meet the wife's entitlements, such sale directly impacts upon the husband's capacity to derive future income from that farmland.
Age and state of health of each of the [marital] parties
117At the date of trial, the husband was 75 years of age, and the wife was 71 years of age. Both marital parties were in reasonable health.
Income, property and financial resources of each of the [marital] parties and the physical and mental capacity of each of them for appropriate gainful employment
118Both marital parties have the physical and mental capacity for appropriate gainful employment, as evidenced by their recent employment history.
119The wife's income from her own building design business, in recent years, has been as follows:
A.2016: $83,346
B.2017: $87,192
C.2018: $219,760
D.2019: $101,540
E.2020: $72,439
F.2021: $121,003
G.2022: $111,560
120The husband continues to work as a farmer. His taxable income has been absorbed by carried-forward losses since at least 2019, at which time he had carried-forward losses of $113,412.00.[78]
[78] Exhibit 20, ''Second Bundle of documents used in the cross-examination of the First Respondent husband handed up in Court on 23 February 2023'' (''Exhibit 20''), electronic pages 15-30 of 175, ''Taxation Estimate for the year ended 30 June 2019 in respect of the First Respondent husband'', electronic page 16 of 175.
121Both marital parties have a legitimate expectation to cease work and retire, at a time of their choosing. However, the husband's ability to continue farming will depend upon whether he is able to pay the wife her judgment sum in a manner which avoids the sale of farmland, or otherwise only requires the sale of such farmland as permits farming to occur at a lesser scale.
122The property of the marital parties has been identified earlier in these reasons. Neither party has financial resources which were submitted to be of any relevance.
Whether either [marital] party has the care or control of a child of the marriage who has not attained the age of 18 years
123Neither marital party has the care or control of a child of the marriage who has not attained 18 years of age.
Commitments of each of the [marital] parties that are necessary to enable the party to support himself or herself and the child or another person that a party has a duty to maintain
124The husband has a duty to maintain, by way of payment of a proper level of child support, his children with Ms F. The husband is not currently assessed to pay, and does not pay, child support for these children.
125This is not a consideration which justice and equity requires to be taken into account in the husband's favour.
Responsibilities of either [marital] party to support any person
126Neither marital party has any responsibility to support any other person.
Eligibility of either [marital] party for a pension, allowance or benefit
127Neither marital party is eligible for a pension, allowance or benefit.
Where [marital] parties have separated or divorced, a standard of living that in all the circumstances is reasonable
128Given the size of the asset pool available for division, each of the marital parties will enjoy a standard of living that, in the circumstances, is reasonable.
Extent to which a [marital] party has contributed to the income, earning capacity, property and financial resources of the other [marital] party
129The husband has made indirect contributions to the wife's income and earning capacity. The wife cultivated her skills in her business during cohabitation and has continued to generate a regular and reliable level of taxable income since separation.
130The wife has contributed to the husband's income and earning capacity (including the income and earning capacity of the trusts and corporate entities) as an incident of her contributions (direct and indirect, financial and non-financial) to property that both currently exists, and property that formerly existed, together with her contributions to the welfare of the family.
131Contributions to property have been assessed earlier in these reasons.
132Neither marital party has financial resources.
Duration of the marriage and the extent to which this has affected the earning capacity of either [marital] party
133The marital parties were married for 31 years before separation. The earning capacity of each party has not been affected by the duration of the marriage.
If either [marital] party is cohabiting with another person - the financial circumstances relating to the cohabitation
134Neither marital party is cohabiting with another person. After separation, the husband cohabited with his former partner, Ms F. The financial circumstances relating to that period of cohabitation were opaque, but the evidence suggests that each of the marital parties paid for that party's own expenses.
135This is not a consideration which justice and equity requires to be taken into account in the husband's favour.
Terms of any order made or proposed to be made under Section 79
136Based upon the Court's assessment of contributions and taking into account the property already retained by the wife, the husband will be required to pay the wife the sum of $2,300,000. The precise terms of the order, subject to evaluating these adjustment factors, are discussed later in these reasons.
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
137Neither marital party has any current or future liability to pay child support for a child of the marriage.
Any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account
138Mr E was a member of the household from December 1984 until May 2005, including his childhood, from eight years of age until his eighteenth birthday. As an adult, Mr E worked on the farm until May 2005. Most of his childhood was spent on the farm, because his father lived in Perth. The husband taught Mr E farming techniques at an early age. This is a factor favouring the husband.
139The Court does not propose to ''add back'' either marital party's paid legal fees. Each party has paid a similar sum. The Court does not consider that the interests of justice require the Court to add back the husband's but not the wife's paid legal fees. But for such payment, these funds would appear as respective assets of each party. Adding back each party's legal fees has no material impact on the outcome.[79] Not adding back means a payment of just under $35,000 less to the wife.
[79] Trevi & Trevi (2018) FLC 93-858 at 78,456 [43]-[45].
140While the Suburb B property is pregnant with Capital Gains Tax upon disposal, the Court is not satisfied from the evidence that there is any likelihood that the property will be realised in the foreseeable future or mid-term future.[80]
[80] Lovine & Connor and Anor at [119].
141Other relevant considerations will be later discussed, when the Court considers what form of orders is just and equitable.
Conclusion on other adjustment factors
142The Court does not propose to make any adjustment to the marital parties' contributions-based entitlements. The Court will make orders which will have the likely effect of creating an unequal sharing of the asset pool after the implementation of the orders. For reasons which later appear, the Court considers that the terms of such orders are just and equitable in content, and in their practical effect.
Consideration as to what orders are just and equitable
143This is not a case where the Court proposes to make orders adjusting the marital parties' property interests in percentage terms, for the following reasons:
1.The Court was able to identify the existing legal and equitable interests of the marital parties in property and assess their respective contributions, until the date of trial, in percentage terms.
2.The marital parties agree, and the Second Respondent does not, that the husband be substituted as the sole guarantor, in lieu of the parties as joint guarantors, in respect of the loans by the Second Respondent, which are the subject of the Supreme Court proceedings. The marital parties further agree on a consequential order that the Second Respondent take such steps as necessary to remove the wife as the Fourth Defendant by counter-claim in the Supreme Court proceedings, on the basis of there being no order as to costs between the Second Respondent and the wife only.
3.The outcome of the Supreme Court proceedings is unclear; if the husband (through the Balfour Holdings Trust) is unsuccessful, there are likely to be substantial costs payable, in addition to the outstanding loans and ongoing accrued interest. If the husband is successful, there is the possibility of an extinguishment of the loans and accrued interest, and potentially, the payment of funds by the Second Respondent.
4.The wife is content for the husband (and his entities) to retain the benefit, or the burden, of the Supreme Court proceedings.
5.The husband commenced the Supreme Court proceedings without notice to the wife and continues to conduct such proceedings without her consent or support (which, the Court accepts, he does not legally require).
6.If paying more than $1,000,000 to the wife, the husband seeks an opportunity to adduce further evidence from himself about how he proposes to reconfigure his land holdings to maintain the viability of the farming operations on an ongoing basis. He also seeks an opportunity to adduce further evidence from his accountant, limited to the taxation consequences (if any) of selling any part of the farm holdings to raise the funds necessary to pay the wife, and of extracting the funds necessary to pay the wife.
Orders affecting the interests of the Second Respondent
144Contrary to the submissions of the Second Respondent, the Court intends to make orders sought by the wife, to the following effect:
1.Pursuant to Section 90AE(1)(a) of the Act, an order directing the Second Respondent to substitute the husband for both marital parties, in relation to the debt owed to the creditor; the effect of this order is that the husband will assume the wife's liability under the guarantee that she gave in 2009, as affected by her notice given in April 2016, accepted by the Second Respondent, fixing her personal liability to the Second Respondent.
2.Pursuant to Section 90AE(2)(b), an order consequential upon the preceding order, directing the Second Respondent to take such steps as necessary to remove the wife as the Fourth Defendant by counter-claim in the Supreme Court proceedings, on the basis of there being no order as to costs as between the wife and the Second Respondent.
145The Court does not intend to make orders, as sought by the wife, which affect the Second Respondent's right to control the proceeds of sale of any land which is subject to its securities.
146In making these orders, and not the further orders sought by the wife, the Court is satisfied, pursuant to Section 90AE(3) and (4), that:
1.The making of these orders is reasonably necessary, or [alternatively] reasonably appropriate and adapted, to effect a division of property between the marital parties.[81] The wife is entitled to a 'clean break' in her financial relationship with the husband. Without notice to her, the husband started the Supreme Court proceedings in February 2018. The Second Respondent, by counter‑claim, joined the wife as a party. The wife has no control over the course of these proceedings. She contends that the husband is unreasonable in pursing the proceedings. She is content to leave him with the benefits, or detriments, connected to the litigation. Eight years after separation, and six years after the commencement of the Supreme Court proceedings, the Court is satisfied that a line should be drawn in respect of the marital parties' respective legal obligations in the Supreme Court proceedings. The Court is satisfied that only the husband and his entities should be financially liable for their ongoing prosecution of the Supreme Court proceedings.
[81] AC & VC (2013) FLC 93-540 at 87,136 [99].
2.Based upon the evidence of Mr I, in particular clause 11(b) of the Certificate annexed to his affidavit, assuming no adjustments have been made to interest rates, interest accrues at the rate of $888.63 per day, on the total debt of $2,327,667, as at 31 January 2023.[82] For a thirteen‑month period ending on 29 February 2024, the total interest bill is around $350,120. On this basis, the total debt is around $2,677,787. This is not intended to be a precise calculation, but a recognition by the Court that interest has continued to accrue on the debt since trial. When this order is made, in light of the balance of the orders which the Court proposes to make, it is not reasonably foreseeable that the total debt (inclusive of interest) will not be paid in full.
[82] Mr I's Affidavit, Annexure ''[MI]-1'', ''Certificate dated 1 February 2023'', electronic page 9 of 9.
3.The Second Respondent has been accorded procedural fairness in relation to the making of this order.
4.The Court is satisfied, in all the circumstances, that it is just and equitable to make the order.
5.The orders made under Section 90AE do not have any taxation effect upon the parties to the marriage.
6.The orders made under Section 90AE do not have any taxation effect upon the Second Respondent.
7.There is no relevant social security effect of the Section 90AE orders on the parties to the marriage.
8.The Court is satisfied that the Second Respondent's administrative costs in relation to the orders are not matters which should affect the Court's determination, given that the Second Respondent has not made submissions or given evidence about such costs.
9.The Second Respondent has the economic and legal capacity to comply with the order.
10.In written submissions, the Second Respondent relevantly contends that if the sale portion is required to be sold to pay the wife her entitlement, the Second Respondent is first entitled to receive the proceeds of sale in satisfaction of its securities, and then the wife is entitled to receive such sum to satisfy her entitlement, before the husband or his entities receive the balance. If this occurs, then these particular Section 90AE orders are not ''reasonably necessary'' or ''reasonably appropriate and adapted'' to effect a division of property between the marital parties.
11.The Second Respondent says, and the Court accepts, that even if it receives payment of the disputed debt prior to the determination of the Supreme Court proceedings, this does not prejudice the husband and his entities continuing to pursue the proceedings. The Second Respondent submits, and the Court accepts, that there is no doubt that the Second Respondent has the capacity to meet any award which the Supreme Court may make against it in those proceedings.
12.In response to the written submissions of the Second Respondent, the Court accepts that it should not interfere with the Second Respondent's right to receive the proceeds of sale of any of the secured farmlands to discharge its claim, prior to the wife receiving her entitlement from the balance of the proceeds of sale. Such interference is not ''reasonably necessary'' or ''reasonably appropriate and adapted'' to effect a division of property between the marital parties.
13.The Court rejects the submissions of the Second Respondent recorded in sub-paragraph (10) above, because if the husband pursues the Supreme Court proceedings in the circumstances described in sub-paragraph (11) above, then the wife should have no further part in them as a party, or a guarantor.
Other relevant matters pertaining to the form of orders
147The Court is satisfied that justice and equity requires a form of order which requires the husband (and his entities) to be solely responsible for the ongoing costs, benefits and burdens of the Supreme Court litigation. The marital parties agree that orders should be made to give effect to this proposition.
148In being satisfied that this form of order is just and equitable, the Court takes into account that the interest on the loan facilities continues to accrue while the loans remain outstanding, subject to any successful outcome in the Supreme Court proceedings. In practical terms, even if all other items in the asset pool at trial remain unchanged, the actual sum required to discharge the loans will be greater than the sum fixed as at 31 January 2023. In practical terms, if the husband, and his entities, are successful in the Supreme Court proceedings, then the loan balance may be eliminated. The corollary is the case, if the husband is unsuccessful in the Supreme Court proceedings.
149By seeking payment of a dollar sum to the wife, each of the marital parties effectively concedes that the husband retains the benefit (or burden) of any increase (or decrease) in the value of the landholdings upon sale, if such is required.
150The Court is not satisfied that justice and equity requires that, if paying more than $1,000,000 to the wife, the husband be given an opportunity to adduce further evidence from himself about how he proposes to reconfigure his landholdings to maintain the viability of the farming operations on an ongoing basis, or an opportunity to adduce further evidence from his accountant, limited to the taxation consequences (if any) of selling any part of the farm holdings to raise the funds necessary to pay the wife and of extracting the funds necessary to pay the wife.
151The Court will not be aided in making just and equitable orders by receiving further evidence from the husband about how he proposes to reconfigure his landholdings to maintain the viability of farming operations on an ongoing basis. The Court is satisfied that the orders it proposes to make are just and equitable and may result in the husband not being able to maintain a viable farming operation on an ongoing basis. The Court is satisfied that if the husband acts prudently, including in respect of the Supreme Court proceedings, he will have a sufficiently large capital base upon which to retire and enjoy a standard of living that, in all the circumstances, is reasonable. Just and equitable orders are not required to make additional provision for the husband if he does not act in a financially prudent manner.
152In lieu of giving the husband an opportunity to file further evidence from his accountant, the Court proposes to make an order to the effect that, in the event the husband incurs a legitimate and reasonable net realisation cost or net liability (including a taxation liability) in paying the wife her entitlements under these orders, then the wife must reimburse the husband a sum equal to 50 percent of such net realisation cost, or net liability. The requirement for reimbursement means that the husband must make the payment first, and then seek repayment from the wife. The Court will grant the parties liberty to apply in relation to the implementation of this order. On the liberty to apply, the Court will determine if a payment is ''legitimate and reasonable'', if such is in dispute. Given the liberty to apply, prudence dictates that the marital parties should first confer as to whether such proposed payment, and the transaction underlying same, is ''legitimate and reasonable''. A payment may be legitimate but not reasonable, if the underlying transaction is not tax effective.
153In lieu of giving the husband an opportunity to file further evidence from himself about how he proposes to reconfigure his landholdings to maintain the viability of the farming operations on an ongoing basis, the Court intends to give the husband six months to pay the wife the judgment sum of $2,300,000. Interest at the rate of six percent per annum will accrue on the unpaid balance of the judgment sum, if such is not paid within 60 days of these orders. This equates to around $378 per day, or around $10,586 every four weeks, or $138,000 per annum. Given that the proceedings have been on foot since 2018, the wife is entitled to interest on the judgment sum if such is not paid within 60 days. The Court is not satisfied that interest as calculated pursuant to Rule 313 of the Family Court Rules 2021 is just and equitable and considers that a rate of six percent is a reasonable rate, in the circumstances of this case.
154If the sum (plus interest) is not paid within six months, then the wife will be granted liberty to sell all or part of Farm A. Upon the sale, the Second Respondent will first be entitled to receive the sum required to be paid in order to discharge its mortgages and securities. The Court relies upon the submissions of Senior Counsel for the Second Respondent, that such payment is made without prejudice to the husband's right to pursue the Supreme Court proceedings and, if successful, to seek reimbursement from the Second Respondent. Secondly, the wife will be paid her entitlement, and finally, the husband will receive the balance.
155The Court otherwise proposes to make orders based upon consideration of the Minutes of Proposed Orders tendered by each party at trial. The parties recorded minor disparities about real estate title particulars in the respective recitals of their Minutes of Proposed Orders. The Court relies upon the title particulars recorded in the Orders made on 1 December 2020, appointing Mr G to value the farming properties, together with considering the copy titles tendered at trial.[83]
[83] Exhibit 10.
Proposed orders
156Subject to hearing from the parties as to form, the Court proposes to make the following orders:
RECITALS:
A.''the Applicant'' is the wife, Ms Balfour.
B.''the First Respondent'' is the husband, Mr Balfour.
C.''the Second Respondent'' is The Bank (a division of [redacted]) (ACN [redacted]).
D.''[Australian Bank A]'' is the [Australian Bank A].
E.''Company A'' is the company Company A (ACN [redacted]) registered on 31 May 1973. The First Respondent is the sole director. Of the 2,200 ordinary shares, the First Respondent holds 200 ordinary shares and Mr Balfour Nominees Pty Ltd holds 2,000 ordinary shares.
F.''Mr Balfour Nominees Pty Ltd'' is the company Mr Balfour Nominees Pty Ltd (ACN [redacted]) registered on 22 February 1977. The First Respondent is the sole director. Of the two ordinary shares, Ms A holds one ordinary share and Ms B holds one ordinary share.
G.''Balfour Holdings Trust'' is a discretionary trust. Pursuant to the Trust Deed dated 1 October 2008 and the Deed of Variation dated 2012:
a) Mr Balfour Nominees Pty Ltd is the corporate trustee;
b) a Named Discretionary Beneficiary is the First Respondent; and
c) the Appointor and Guardian is the First Respondent during his lifetime and in substitution if no appointment made then the children of the husband.
H.''Mr Balfour Family Trust'' is a discretionary trust. Pursuant to the Trust Deed dated 24 February 1977, the Deed of Variation dated 4 December 2000 and the Deed of Variation dated 2015:
a) Mr Balfour Nominees Pty Ltd is the corporate trustee;
b) a Named Discretionary Beneficiary is the First Respondent; and
c) the Appointor and Guardian is the First Respondent during his lifetime and in substitution if no appointment made then the children of the husband.
I.''the Partnership'' is the partnership Mr Balfour and Ms Balfour trading as Partnership A.
J.''the Entities'' is collectively: Company A, Mr Balfour Nominees Pty Ltd, Balfour Holdings Trust, Mr Balfour Family Trust, and the Partnership.
K.''Company B'' is the company Company B (ACN [redacted]) registered on 7 June 1995. The directors are the First Respondent and [Mr K]. The secretary is the First Respondent. The First Respondent and Mr Balfour Nominees Pty Ltd hold ordinary and redeemable preference shares:
a) Mr Balfour Nominees holds 21,330 and 339,262 of the 685,179 issued $1.00 ordinary shares in Company B.
b) Mr Balfour Nominees holds 350,498 of the 642,972 issued $1.00 redeemable preference shares in Company B.
L.''the Suburb A property'' is the real property located at redacted in the State of Western Australia, being Lot [redacted] on Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted], held in the former married name of the Applicant, Ms Balfour.
M.''the Suburb A Loan'' is the Australian Bank A loan held in the name of the Applicant.
N.''the Suburb B property'' is the real property located at [redated] in the State of Western Australia, being Lot [redacted] on Strata Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted], held in the name of the Applicant.
O.''the Suburb B Loan'' is the Australian Bank A loan held in the name of the Applicant.
P.''Farm B'' is the real property located in the State of Western Australia, being Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted], held in the name of Company A.
Q.''Farm A'' is the real property located in the State of Western Australia comprising of:
a) Parcel 1 of Farm A;
b) Parcel 2 of Farm A; and
c) Parcel 3 of Farm A, plus Lot A, plus Lot B.
R.''Parcel 1 of Farm A'' is the real property located in the State of Western Australia held in the name of Company A, comprising of:
a) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
b) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
c) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
d) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
e) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
f) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
g) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted]; and
h) Lot [redacted] and LOT [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted] (Multi Lots).
S.''Parcel 2 of Farm A'' is the real property located in the State of Western Australia held in the name of Company A, comprising of:
a) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
b) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
c) Multi Lot Title contained on Certificate of Title Volume [redacted] Folio [redacted]:
i.Lot [redacted] on Deposited Plan [redacted];
ii.Lot [redacted] on Deposited Plan [redacted];
iii.Lot [redacted] on Deposited Plan [redacted];
iv.Lot [redacted] on Deposited Plan [redacted]; and
v.Lot [redacted] on Deposited Plan [redacted].
T.''Parcel 3 of Farm A'' is the real property located in the State of Western Australia held in the name of Mr Balfour Nominees Pty Ltd as trustee for the Mr Balfour Family Trust, comprising of:
a) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume 811 Folio 48;
b) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
c) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
d) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
e) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
f) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
g) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
h) Lot [redacted] on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted];
i) Multi Lot Title contained on Certificate of Title Volume [redacted] Folio [redacted]:
i.Lot [redacted] on Deposited Plan [redacted];
ii.Lot [redacted] on Deposited Plan [redacted].
U.''Lot A'' is the real property located in the State of Western Australia, being Lot A on Diagram [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted], held in the name of Mr Balfour Nominees Pty Ltd as trustee for the Mr Balfour Family Trust.
V.''Lot B'' is the real property located in the State of Western Australia, being Lot B on Deposited Plan [redacted] contained on Certificate of Title Volume [redacted] Folio [redacted], held in the name of Mr Balfour Nominees Pty Ltd as trustee for the Mr Balfour Family Trust.
W.''the Supreme Court proceedings'' as action CIV [redacted] of [redacted] in the Supreme Court of Western Australia, and all claims and counter-claims made therein.
X.''the Second Respondent Loans'' means the loans made to the Entities which are the subject of the Supreme Court proceedings.
Y.''the Second Respondent Mortgages'' means mortgages [redacted], [redacted], and [redacted] secured against Farm B and/or Farm A.
Z.''the Valuation Report'' is the All Asset Appraisals Valuation amended valuation report dated 11 April 2019.
ORDERS
Guarantees
1.An order pursuant to Section 90AE of the Family Law Act 1975 (Cth) that the First Respondent be substituted as sole guarantor in lieu of the Applicant and the First Respondent as joint guarantors in respect of the Second Respondent Loans and Second Respondent Mortgages.
2.A consequential order that the Second Respondent do take such steps as necessary to remove the Applicant as the Fourth Defendant by counter-claim in the Supreme Court proceedings on the basis of there being no order as to costs as between the Second Respondent and the Applicant only.
Property of the Applicant
3.All of the interest of the First Respondent (if any) in the following vest in the Applicant absolutely:
a) the Suburb B property;
b) the Suburb A property;
c) the business trading as Ms Balfour Designs;
d) any money standing to the credit of the Applicant in any accounts with a bank or other financial institution in the Applicant's name or over which she has control;
e) the Applicant's superannuation entitlements, including but not limited to her Superannuation A;
f) any shares in the Applicant's name including but not limited to her 400 [Telecommunications Company E] 100 [Company F], 60 Australian Bank A and 100 [Australian Bank B] shares;
g) the Applicant's motor vehicle in the possession of the Applicant;
h) all furniture or chattel items in the current possession of the Applicant; and
i) all other property of whatsoever nature or kind in the ownership, possession or control of the Applicant not specifically referred to in these Orders.
4.Unless otherwise provided for in these Orders, the Applicant do pay and indemnify the First Respondent and keep him indemnified in relation to any and all liabilities in her sole name including but not limited to:
a) the Suburb B Loan;
b) the Suburb A Loan;
c) credit card accounts (if any);
d) personal loans in her sole name (if any); and
e) personal tax liabilities in her sole name (if any).
Property of the First Respondent
5.Subject to the provisions of these Orders, all of the interest of the Applicant in the following vest in the First Respondent:
a) Mr Balfour Nominees Pty Ltd;
b) Company A;
c) The Balfour Holding Trust;
d) The Mr Balfour Family Trust;
e) Company B;
f) The Partnership;
g) the First Respondent's superannuation entitlements, including but not limited to his Superannuation A;
h) any shares in the First Respondent's name including but not limited to his 2,342 Company F, 2,342 [Retail Company G] and 527 Company C shares;
i) any motor vehicle in the possession of the First Respondent; and
j) all furniture or chattel items in the current possession of the First Respondent.
6.The Applicant transfer to the First Respondent her right to receive, and her obligation to pay, any monies standing in the accounts of the Entities or any of them, including any loan accounts or unpaid present entitlements.
7.The First Respondent do pay and indemnify the Applicant and keep her indemnified in relation to:
a) all actions, proceedings, costs, claims and expenses relating to or arising out of the Applicant's interest or involvement, if any, in the Entities and in any other company, partnership, business or other entity in which the First Respondent has or has had an interest or involvement or in which the First Respondent together with the Applicant or any other person or entity has or has had an interest or involvement prior to the date of these Orders;
b) all debts and liabilities whatsoever arising out of the operation of the Entities and trusts and the income derived therefrom or any related entity, or in respect of any transactions pursuant to these Orders;
c) the Supreme Court proceedings;
d) the Second Respondent Loans;
e) credit card accounts in his sole name (if any);
f) personal loans in his sole name (if any); and
g) personal tax liabilities in his sole name (if any (including but not limited to the Applicant's loan accounts, if any)); and
h) any outstanding GST, Capital Gains Tax and all unpaid income tax assessed or hereafter assessed in respect of any income from or derived from or credited to the Applicant by the Entities or any of them.
Adjusting payment
8.The First Respondent pay to the Applicant within 60 days the sum of $2,300,000 (''the judgment sum'') and interest is payable on the unpaid balance of the judgment sum at the rate of six percent per annum from Day 61 until the judgment sum is paid.
9.Pending payment of the sum referred to in paragraph 8 the First Respondent be restrained by injunction from disposing, encumbering or further encumbering all or any part of Farm B or Farm A save and except for the purpose of making such payment to the Applicant.
10.To secure the payment to the Applicant pursuant to paragraph 8 of these Orders and any other monies payable to her under the indemnities in paragraph 7 of these Orders the First Respondent cause Mr Balfour Nominees Pty Ltd and Company A to charge Farm A and for this purpose the Applicant be at liberty to lodge a caveat in relation to Farm A (at her expense) to notify her interest as equitable mortgagee/charge.
11.In the event the First Respondent does not pay the judgment sum (plus interest) by 4:00pm on 30 August 2024, then and in such case, the Applicant be appointed sole trustee for sale of all or part of Farm A and upon settlement of the sale the proceeds of sale be applied as follows:
a) in payment, or reimbursement to payer, of reasonable costs, commissions and expenses of and incidental to the sale;
b) in payment of such sum as is necessary to discharge the Second Respondent Mortgages and Second Respondent Loans (such payment being made without prejudice to the competing claims in the Supreme Court proceedings);
c) in payment to the Applicant of the judgment sum plus interest pursuant to paragraph 8 of these orders; and
d) in payment of the balance to the First Respondent.
12.In the event the First Respondent incurs a legitimate and reasonable net realisation cost or net liability (including a taxation liability) in paying the Applicant the judgment sum and interest (if applicable), then the Applicant shall indemnify and pay to the First Respondent a sum equal to 50 percent of such liability.
13.Further to the preceding order, in the event of dispute arising as to whether any net realisation cost or net liability (including a taxation liability) is legitimate and reasonable, the Applicant and the First Respondent have liberty to apply to the trial judge (or another judge in the event the trial judge is not reasonably available) for orders determining the extent of the Applicant's liability pursuant to the preceding order.
Declaration of property ownership
14.Unless otherwise specified in these Orders and except for the purposes of enforcing payment of any money due under these or any subsequent Orders, each party is solely entitled to all property and financial resources in their possession on the date of these Orders to the exclusion of the other, and for this purpose:
a) banking and other accounts are deemed to be in the possession of the person whose name appears on the records of the relevant financial institution;
b) insurance policies are deemed to be in the possession of the insured named in the policy;
c) superannuation entitlements are deemed to be in the possession of the person named as the worker whose age or working future provides the conditions for payment out of such entitlements; and
d) each party is solely liable for and indemnifies the other against any liability encumbering any item of property or financial resource to which that party is entitled under these Orders.
Implementation
15.Each party do all such things as are necessary and sign all such documents as are necessary to give effect to these Orders.
16.Each party have liberty to apply in relation to the implementation of these Orders by providing the other party with no less than seven days' written notice.
17.The parties be at liberty to provide of a copy of these Orders to:
a) any real estate agent, settlement agent and accountant to implement these Orders; and
b) any bank in which the parties hold an account that is referred to in these Orders.
Procedural
18.All documents produced by named persons pursuant to subpoena be returned or destroyed in accordance with the request from the named person on the expiration of 42 days from this Order.
19.In relation to material tendered as an exhibit into evidence in these proceedings:
a) all parties must collect their exhibits tendered by them (''their exhibits'') from the Chambers of the Honourable Justice Berry at least 42 days, and no later than 56 days, from the date of this Order;
b) all parties must contact the Chambers of the Honourable Justice Berry to arrange the collection of their exhibits; and
c) in default of compliance with sub-paragraph (a), all material tendered as an exhibit, save and except for material produced pursuant to subpoena, will be destroyed by the Court without notice to the parties.
20.All material tendered as an exhibit and uploaded electronically by the Court will be destroyed by the Court without notice to the parties on the expiration of 42 days from this Order.
21.In the event of an appeal being lodged prior to the expiration of 42 days from this Order, paragraphs 18, 19 and 20 above do not apply.
22.Any application for costs (including costs reserved) must be consolidated in a Form 2 Application with a supporting affidavit and filed and served within 28 days of this Order.
23.Subject to the preceding orders, the Form 1 Initiating Application filed by the Applicant on 23 November 2016 as amended on 23 December 2020 and the Form 1A Response filed by the First Respondent on 8 March 2017, and all outstanding interim proceedings, be dismissed.
SCHEDULE (EXHIBIT 4)
Joint property schedule updated [D]ay 1 [of] trial 21 February 2023
| A | B | C | D | |
| 1 | Particulars | Wife Values | Husband Values | Comments |
| 2 | ||||
| 3 | Property of Wife | |||
| 4 | [Suburb A Property] | 1,550,000 | 1,550,000 | Valuations WA report 28.11.2022 |
| 5 | [Suburb B Property] | 650,000 | 650,000 | Valuations WA report 28.11.2022 |
| 6 | [Australian Bank A] Mortgage [redacted] | -88,718 | -88,718 | As at 31.12.2022 - |
| 7 | [Australian Bank A] [Account] [redacted] | 35,454 | 35,454 | As at 31.12.2022 - |
| 8 | [Australian Bank A] [Account] [redacted] | 9,104 | 9,104 | As at 31.12.2022 |
| 9 | [Australian Bank A] Term Deposit [redacted] | 0 | 0 | As at 31.12.2022 - |
| 10 | [Australian Bank C] [Account] [redacted] | 3,600 | 3,600 | As at 31.12.2022 |
| 11 | [Australian Bank C] [Account] [redacted] | 94 | 94 | As at 25.08.2022 - WDD A4.5.11 |
| 12 | [Australian Bank A] [Account] [redacted] | 0 | 0 | As at 22.09.2022 - WDD A4.9.4 |
| 13 | [Austalian Bank D] Everyday Account | 8,255 | 8,255 | As at 20.01.2023 |
| 14 | [Australian Bank E] Term Deposit [Account] [redacted] | 105,000 | 105,000 | As at 31.12.2022 - WDD A4.8.12 |
| 15 | [Superannuation A] | 93,848 | 93,848 | As at 20.01.2023 - WDD A6.13 |
| 16 | 400 [Telecommunications Company E] [s]hares | 1,596 | 1,596 | WDD A10.19 - SP at 30.12.2022 |
| 17 | 100 [Company F] shares | 4,591 | 4,591 | [A]s at 30.12.2022 |
| 18 | [Retail Company H] shares | 0 | 0 | Held on trust for [Mr E] – see Affidavit of [Mr E] |
| 19 | 60 [Australian Bank A] shares | 6,156 | 6,156 | [A]s at 30.12.2022 |
| 20 | 100 [Australian Bank B] shares | 3,006 | 3,006 | [A]s at 30.12.2022 |
| 21 | 16 [Mining Company I] [s]hares | 730 | 730 | As at 31.12.2022 - |
| 22 | 1,400 [Mining Company J] shares | 392 | 392 | [A]s at 31.12.2022 |
| 23 | Interest in [Suburb C] property | NIL | NIL | No interest in [Suburb C] |
| 24 | Personal effects, including Toyota Prado | 30,250 | 70,000 | Landcruiser 2010 at $28,250[,] jewellery[,] artwork at $2,000 |
| 25 | Interest in [redacted] Trust | 0 | 0 | Closed |
| 26 | Income tax account | -6,988 | -6,988 | As at 20.01.2023 - WDD A5.71 |
| 27 | [Australian Bank E] Term Deposit [Account] 215575952 | 500,000 | 500,000 | Wife Inheritance [a]s at 31.12.2022 |
| 28 | [Australian Bank D] [Account] 810394301 | 442,889 | 442,889 | Wife Inheritance [a]s at 31.12.2022 |
| 29 | Wife[']s solicitors' trust account | 14,610 | 14,610 | [A]s at 31.12.2022 |
| 30 | ||||
| 31 | WIFE'S NET Property | 3,363,868 | 3,403,618 | |
| 32 | ||||
| 33 | Property of Husband in personal name | |||
| 34 | 1,048 [Company F] [s]hares | 48,114 | 48,114 | 1,048 shares at $45.91 [per share] |
| 35 | 1,444 [Retail Company G] [shares] | 24,114 | 24,144 | 1,444 shares at [$]17.93 [per share] |
| 36 | 527 [Company C] [s]hares | 0 | 0 | Requested from [the husband] |
| 37 | [Australian Bank A] Account 066522 10127142 | 9,821 | 9,821 | Agreed |
| 38 | [Superannuation A] | 62,353 | 62,353 | Agreed |
| 39 | 1981 Holden Panel Van and 1982 Mercedes Benz | NK | [NK] | [N]ot included in plant valuations |
| 40 | Unpaid [s]uperannuation | [NK] | [NK] | [A]s per 2022 accounts - due to ?[sic] |
| 41 | Husband's solicitors' [t]rust account | 0 | 1,438 | [The husband] to vouch |
| 42 | ||||
| 43 | Net Husband personal property | 144,432 | 145,870 | |
| 44 | ||||
| 45 | [BALFOUR NOMINEES PTY LTD] ATF THE [BALFOUR HOLDINGS TRUST] – Not including inter entity Loans. | |||
| 46 | Cash | 10 | 10 | [A]s per 2022 accounts |
| 47 | Plant [and] Equipment | 97,558 | 251,450 | AAA Valuation February 2019 WDD F.1.4.30 |
| 48 | Westpac Business Flexi Account #6276 | 7,217 | 7,217 | [A]s per 2022 accounts |
| 49 | [Company D] [s]hares | 1,293 | [NIL] | Requested disclosure of [the] husband |
| 50 | Sheep ex[sic] [Rural Town C] | 225,760 | [Included] in Row 51 | AAA Valuation February 2019 WDD F.1.4.30 |
| 51 | Sheep and Cattle [Rural Town A] | 241,110 | 306,240 | AAA Valuation February 2019 WDD F.1.4.30 |
| 52 | Sheep [Rural Town B] | 81,900 | 89,600 | AAA Valuation February 2019 WDD F.1.4.30 |
| 53 | Livestock | 0 | [Included] in Rows 51 and 52 | Total account to AAA 2023 [Valuation] – [$]395,840 |
| 54 | Loan – [Company B] | 22,066 | [NIL] | [The husband] to vouch, [the wife] as per 2022 accounts |
| 55 | Unpaid [s]uperannuation | -20,945 | -20,945 | [A]s per 2022 accounts - due to ?[sic] |
| 56 | GST payable | -1,661 | -1,661 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 57 | PAYG payable | -200 | -200 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 58 | ATO – ICA payable | -61,064 | -61,064 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 59 | Farmers centre | -3,758 | -3,758 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 60 | [redacted] | -1,908 | -1,908 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 61 | Rates [S]hire of [Rural Town B] | -2,254 | -2,254 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 62 | Rates [S]hire of [Rural Town A] | -2,216 | -2,216 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 63 | Shire of [Rural Town A] | 0 | -7,150 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 64 | [The Bank] Overdraft | -1,578,156 | -1,769,492 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 65 | [The Bank] Term Loan | -506,089 | -507,245 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 66 | See [the wife's] Up date Affidavit para 18 – 21 | |||
| 67 | NET ENTITY ASSETS | -1,501,337 | -1,723,376 | |
| 68 | ||||
| 69 | [BALFOUR NOMINEES PTY LTD] ATF [THE MR BALFOUR FAMILY TRUST] not including inter [e]ntity [l]oan accounts | |||
| 70 | [Australian Bank A] 013 | 567 | 567 | |
| 71 | Cash on [h]and | 50 | 50 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 72 | [Australian Bank C] Cash Reserve Account 4751 | 11 | 11 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 73 | Property, plant and [equipment] | 335,250 | [Included] in Row 47 | AAA Valuation February 2019 WDD F.1.4.30 |
| 74 | [Farm A] | 7,100,000 | 7,100,000 | [Single Expert Witness] report [Mr G] updated report for trial |
| 75 | [Company B] [s]hares | 91,874 | [NIL] | [The husband] to vouch, [the wife] as per 2022 accounts |
| 76 | 902 [Company F] [s]hares | 41,411 | 41,411 | [C]urrent value, in 2022 accounts at cost |
| 77 | 902 [Retail Company G] [s]hares | 15,081 | 15,081 | [C]urrent value, in 2022 accounts at cost |
| 78 | ||||
| 79 | NET ENTITY ASSETS | 7,584,244 | 7,157,120 | |
| 80 | ||||
| 81 | [COMPANY A] – not including inter entity loans | |||
| 82 | ||||
| 83 | [Farm B] farming property: [Lot C] | 2,500,000 | 2,500,000 | [Single Expert Witness] report [Mr G] updated report for trial |
| 84 | Tax Provision | -5,242 | -5,242 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 85 | Shire of [Rural Town A] rates | -3,479 | -3,479 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 86 | ||||
| 87 | NET ENTITY ASSETS | 2,491,279 | 2,491,279 | |
| 88 | ||||
| 89 | [PARTNERSHIP A] – [n]ot including inter entity loans | |||
| 90 | ||||
| 91 | [Australian Bank B] Account #[redacted] | 4,096 | 4,096 | [The husband] to vouch, [the wife] as per 2022 accounts |
| 92 | Plant [and] Equipment | 19,325 | [Included] in Row 47 | AAA Valuation February 2019 WDD F1.4.30 |
| 93 | Loan – [redacted] | [NIL] | [NIL] | Agreed not to be repaid |
| 94 | BOC debt | -507 | -507 | |
| 95 | ||||
| 96 | NET ENTITY ASSETS | 22,914 | 3,589 | |
| 97 | ||||
| 98 | Total Property | 12,105,399 | 11,478,101 | |
| 99 | ||||
| 100 | Other matters | |||
| 101 | ||||
| 102 | Paid to [Ms F] | 66,976 | 66,976 | Quantum agreed, treatment disputed |
| 103 | Add [b]ack [o]ther payments to or for [the] benefit of [Ms F] | 80,000 | [NIL] | Estimate. [The husband] to [v]ouch. |
| 104 | ||||
| 105 | Husband['s] paid legal costs – Family Law | 405,425 | 405,425 | [T]o be vouched by [the husband] |
| 106 | Husband['s] [p]aid [l]egal costs – Supreme Court | 116,000 | 152,876 | [P]er advise[sic] from [Mr J] to KDK [on] 20.02.2023 |
| 107 | Husband['s] unpaid legal costs – Supreme Court | 36,000 | 36,766 | |
| 108 | ||||
| 109 | Wife['s] [p]aid [l]egal costs – Family Court | 395,660 | 395,660 | Largely [p]aid from [i]ncome – to be vouched |
| 110 | Wife['s] paid [d]isbursements – Family Court | 28,110 | 28,110 | |
| 111 | Wife['s] [p]aid [l]egal costs – Supreme Court | 45,000 | TBV[sic] | Cove legal statement WDD A15.5 and invoice |
| 112 | Wife['s] unpaid legal costs – [S]upreme [C]ourt | TBV[sic] | ||
| 113 | Wife['s] payment for the husband['s] share of cost of Expert [v]aluations | 12,075 | Should be paid to [the] wife out of [the] husband['s] share of property after division | |
| 114 | ||||
| 115 | ||||
(As per original)
I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
JW
Associate
29 FEBRUARY 2024
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