Bishop and Bishop
[2009] FMCAfam 957
•18 September 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| BISHOP & BISHOP | [2009] FMCAfam 957 |
| FAMILY LAW – Property – marriage of 24 years – treatment of inheritance –treatment of a joint debt alleged to have been ‘forgiven’ – contributions of the parties initially and during relationship – small adjustment to Husband pursuant to s.75(2) – just and equitable. |
| Family Law Act 1975 (Cth), Part VIII, ss.75 (2), (2)(a) & (b), 79, 79 (4)(a) – (g) Property (Relationships) Act 1984 (NSW) |
| Bilous v Mudaliar (2005) 65 NSWLR 615; [2005] NSWSC 71 Bonnici & Bonnici (1991) 105 FLR 102; (1991) 15 Fam LR 138; (1992) FLC ¶92-272 In the Marriage of Bremner(1994) 18 Fam LR 407; (1995) FLC ¶92-560 C & C (2005) 193 FLR 9; (2005) 33 Fam LR 414; (2005) FLC ¶93-220 Farmer & Bramley(2000) 27 Fam LR 316; (2000) FLC ¶93-060 Ferguson & Ferguson (1978) 34 FLR 342; (1978) 4 Fam LR 312; (1978) FLC ¶90-500 Garrett & Garrett (1984) FLC ¶91-539 Hayne & Hayne (1977) 30 FLR 533; (1977) FLC ¶90-265 In the Marriage of Hickey (2003) 30 Fam LR 355; (2003) FLC 93-143; L & L [2005] FamCA 335 Lee Steere & Lee Steere(1985) 10 Fam LR 431; (1985) FLC ¶91-626 In the Marriage of Money (1994) 117 FLR 372; (1994) 17 Fam LR 814; (1994) FLC 92-485 Norbis v Norbis (1986) 161 CLR 513 AJO & GRO (2005) 191 FLR 317; (2005) 33 Fam LR 134; (2005) FLC ¶93-218 In the Marriage of Pierce(1998) 24 Fam LR 377; (1998) FLC 92-844 Rogers & Rogers (1980) FLC ¶90-874 Russell & Russell (1999) 154 FLR 171; (1999) 25 Fam LR 629; (1999) FLC ¶92-877 Zyk and Zyk (1995) 128 FLR 28; (1995) 19 Fam LR 797; (1995) FLC ¶92-644 |
| Applicant: | MS BISHOP |
| Respondent: | MR BISHOP |
| File Number: | CAC 142 of 2008 |
| Judgment of: | Neville FM |
| Hearing date: | 23 February 2009 |
| Date of Last Submission: | 11 June 2009 |
| Delivered at: | Canberra |
| Delivered on: | 18 September 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr G Brzostowski SC |
| Solicitors for the Applicant: | Walsh & Blair Lawyers (Wagga Wagga) |
| Counsel for the Respondent: | Mr I Nash SC |
| Solicitors for the Respondent: | Gordon Garling Moffitt Lawyers (Property G) |
ORDERS
That the Husband pay to the Wife the sum of $13,917.00 within sixty (60) days.
That the Husband pay to the Wife the sum of $290,000.00 within sixty (60) days.
That contemporaneously with Order 2, the Wife do all such acts and things and sign all such documents as may be required to transfer to the Husband all of her right, title and interest in the real property situate at and known as Property G, and the Husband refinance the mortgage over the ‘Property G’ property into his sole name and indemnify the Wife in respect of that property.
That in the event that Order 2 is not complied with, the Husband and Wife are to do all things necessary to effect the sale of ‘Property G’ at the market value determined in accordance with Order 5.
That the market value of ‘Property G’ be as agreed between the husband and wife or failing such agreement as determined by a valuer nominated by the President of the Real Estate Institute of the ACT, such determination to be paid for by the Husband.
That the parties will each execute a contract for sale in the form prepared by the solicitors.
That the Husband’s solicitor will have the primary conduct of the sale on behalf of both parties.
That the property is to be placed with an agent as agreed between the parties or in default of agreement, with an agent ("the Agent") nominated by the President of the Real Estate Institute of the ACT.
That neither party may confer on any agent without the consent of the other party, any right to sole or exclusive agency in respect of ‘Property G’ or to any commission.
That the parties will each cooperate in every way with the agent including but not limited to:
(a)Making the keys available to the agent;
(b)Allowing inspection of ‘Property G’ at all reasonable times requested by the agent;
(c)Ensuring that ‘Property G’, including the grounds, are in a neat and clean condition at the time of inspection by the agent and prospective purchasers;
(d)Signing all documents requested by an agent in relation to the listing for sale of ‘Property G’ except a contract or agreement for sale which has not been authorised by the parties’ solicitors.
That if ‘Property G’ is not sold within ninety (90) days of the date it was first listed for sale, or if ‘Property G’ is sold and the sale subsequently does not proceed to completion, the Husband and Wife do all things necessary to offer ‘Property G’ immediately for sale by public auction by the Agent, the reserve price being the market value determined in accordance with Order 5.
That in the event that the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of ‘Property G’ at a price which is not more than 10% below the reserve price.
That if ‘Property G’ is not sold at the auction within 21 days thereafter the husband and wife shall meet the market price and sell the ‘Property G’ at the best price then obtainable.
That the Husband and Wife do all things necessary to cause the proceeds of the sale of ‘Property G’ to be distributed as follows:
(a)To pay all costs and expenses of sale including legal costs and disbursements, agent commissions and auction expenses;
(b)To pay the amount required to discharge the mortgage;
(c)To pay the usual rates adjustments;
(d)The amount owed to the Wife in accordance with Orders 1 and 2; and
(e)To pay the balance to the Husband.
That the time limits and the terms and conditions for sale set by these Orders may be varied by the parties by written agreement.
That the Wife retain the funds held in the trust account known as “[L]”.
That if either party refuses, fails or neglects to execute any document necessary to put these Orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by affidavits filed and served by or on behalf of the party alleging this, the Registrar of the Family Court at Canberra be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such document in the name of such party.
That unless otherwise specified in these Orders each party shall otherwise retain any motor vehicles, chattels, bank accounts, personal property and superannuation in their possession or control.
That pursuant to rule 21.02 of the Federal Magistrates Court Rules 2001, the parties may make an application for an order for costs within 28 days of the date of these Orders.
That in the absence of any application pursuant to Order 19, each party pay their own costs.
IT IS NOTED that publication of this judgment under the pseudonym Bishop & Bishop is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 142 of 2008
| MS BISHOP |
Applicant
And
| MR BISHOP |
Respondent
REASONS FOR JUDGMENT
A. Introduction
These property proceedings concern parties who were in a marital relationship for some 24 years. They are currently aged 51 and 52 respectively.
There are three children of the relationship. Those children were born in 1988, 1990 and 1993. Only the last born child remains at [boarding] school in Sydney and otherwise resides with the applicant Wife. The Wife is responsible for all of his educational fees and expenses.
The eldest child is studying at university and both parents share her major expenses. The second child is independent and works as a [omitted]. He lives with the Husband in the former matrimonial home and spends time with his Mother, from time to time, during holiday periods.
The Applicant Wife now resides on the north coast of New South Wales. She has bought a house there. It was fully financed via an interest-free loan from her aunt. It is due to be repaid in 2013, although the Wife said that she would repay her Aunt upon the resolution of these proceedings. The Wife works full-time as a [omitted].
The Respondent Husband continues to reside on a rural property (known as “Property G”), which was purchased from his parents in 1994. He worked throughout the relationship, and continues to do so, as a farmer.[1]
[1] The fact that the major asset of the relationship is a farm does not attract any particular or different considerations. See Lee Steere & Lee Steere (1985) FLC ¶91-626.
To deal with one matter immediately: I find that there are no health issues as between the parties. Although Mr Bishop raised some health issues in his affidavit filed on 30th January 2009 (p.5), in his oral evidence he made a number of admissions regarding his capacity for work – hence my finding.[2]
[2] Transcript (23rd February 2009) p.35 contains Mr Bishop’s cross-examination in which he confirms that he plays a range of sport (tennis, squash, golf, cycling) as well as his evidence regarding his significant range of skills (e.g. welding, stock work, etc) from years of working on farms.
Orders Sought: For her part, the Applicant wife seeks a payment from the husband in the sum of $419,000. This represents an adjustment in the Wife’s favour that results in a split of a net asset pool of $1,434,049 in a ratio that is approximately 57% in her favour with 43% of the pool going to the Husband.
On his side of the ledger, Mr Bishop seeks to pay the wife the sum of $150,000.
B. Issues in dispute
Apart from the overall “just and equitable” order to be made, the scope of the issues to be resolved is relatively few in number. Summarily, they concern (a) the respective “contributions” of the parties (initial and throughout the duration of a very long marriage), (b) whether the balance of moneys owing to the paternal grandparents in relation to the Property G property was “forgiven” in either 2001 or 2002, (c) how to treat a significant inheritance (of $207,336) to the Wife in November 2005, which was approximately 10 months before the parties separated under the one roof in September 2006, and (d) whether a debt due to the Rural Assistance Authority in relation to a bore is a post-separation debt or not.
After the trial concluded both parties provided their individual and partnership tax returns for the year 2007/2008. In the light of those returns, a further issue arose as to how the Court should treat certain tax debts. Counsel for both parties helpfully provided the Court with written submissions as to how the Court should treat them.
Summarily stated, Mr Nash SC, for Mr Bishop, contended that each party should be responsible for their own individual tax debts, which is also to say that, in his submission, it would be unjust and inequitable to include the parties’ respective tax liabilities as matrimonial liabilities. Mr Brzostowski SC, for Ms Bishop, submitted otherwise. I will deal with this further issue in due course.
I will make findings in relation to each of the above matters after I treat the evidence of the parties. After doing so I will then, as summarily as possible, deal with each of the “four steps.”
C. Evidence
Evidence of Ms Bishop: The following matters may be noted from Ms Bishop’s oral evidence, most of which was uncontroversial.
At the outset she agreed that from the commencement of her relationship with Mr Bishop, in November 1982, the couple lived at the property known as “Property T.” That property, located at [G], was owned by a partnership that comprised Mr Bishop and his parents.
The couple lived on that property until Easter 1993 when they moved to the property known as “Property G,” which they purchased from
Mr Bishop’s parents.
The property known as “Property T” was purchased, in two lots, the first by Mr Bishop, then a second portion by Ms Bishop. Approximately two-thirds of “Property T” was sold off in 1993. The proceeds of that sale were used in the purchase of “Property G.”
Throughout the marriage Ms Bishop worked as a [omitted], both full- and part-time, depending on her maternal responsibilities. Thus, she worked full-time as a [omitted] between 1982 and 1986. After taking maternity leave following the birth of [child’s name omitted] in 1988, she moved to casual [omitted] duties between 1990 and 1993 at [workplace omitted] in [G]; in 1995 she worked part-time at the local [omitted]; and between 1996 and 2000, she worked part-time as a [omitted] at two different [workplaces omitted].
The only issue of any moment in her evidence concerning “work” was the extent of her labour (literally) in relation to the farm. Mr Bishop accepted that Ms Bishop did do work around the farm but nowhere near as extensively as she asserted. He did not deny that she did all of the book-work in relation to the farm.
Accepting that, in many respects, this aspect as with the few others that were in dispute, it was very much a case of a “she said” – “he said” situation, should it be necessary to make any formal finding on this point, I am of the view that Ms Bishop’s involvement in the regular work of the farm was much closer to her claims than those made by
Mr Bishop. In addition to her forthright evidence, the Court has the benefit of an affidavit from a neighbour (Mr W: affidavit filed
8th January 2009) who deposes to seeing Ms Bishop doing significant amounts of work, over a significant period of time, on the Bishop’s then property (“Property T”), which adjoined his.
In his affidavit of 23rd January 2009 (par.4), Mr Bishop said that Mr W had exaggerated Ms Bishop’s involvement with farming duties. He specifically disputed Mr W’s sworn statement (par.7 of his affidavit): “I observed [Ms Bishop] either by herself or with her children moving the stock 90% of the time.” Mr W was not required for cross-examination. Even allowing for some imprecision or even exaggeration, I have some difficulty with the outright challenge to Mr W’s evidence regarding to what he saw.
She did not deny that upon the sale of the last portion of “Property T” in 2007, the proceeds of $65,944 went into her superannuation account, and that there was no corresponding contribution to Mr Bishop’s superannuation. Among other things, it seemed to be accepted that she did this to minimise the risk of incurring capital gains tax.
Ms Bishop also explained, in a straight-forward way, why she dealt with a significant inheritance she received from an Aunt in the UK in 2005 in the way she did.[3] First, she confirmed that Mr Bishop was not part of the financial advice she took because she did not want the funds (of approximately $207,000) “to disappear into the farm”, which at that stage was many years severely affected by drought and consequently consuming considerable resources (including financial) at a significant rate.
[3] See Transcript (23rd February 2009) pp.13-16.
Secondly, and it should be said, for the first time in evidence, she stated that the funds were placed in a trust for `the children’s education.’
Ms Bishop is the sole beneficiary named in the trust deed. She controls the trust. It would appear however that nothing has been spent from that trust fund on the children’s education – thus far.[4] Indeed, apart from $500 that was used for her own purposes, the funds remain intact and invested on behalf of the trust.
[4] A copy of the trust deed, dated 22nd May 2006, became Exhibit C.
I accept the submissions, from both Counsel, that this windfall sum that came directly to Ms Bishop and in relation to which there could be no claim (by contribution or otherwise by Mr Bishop), should be treated, to use Mr Nash’s terms, as `money in and money out.’ Accordingly, I will include it in the asset pool but note that it will go directly to Ms Bishop on the basis proposed by Counsel.
In relation to a “debt” said to be owing to Mr Bishop’s parents in the sum of $30,000, Ms Bishop (a) acknowledged that it still showed up in the partnership accounts of 2007,[5] and (b) confirmed that Mr Bishop was present during a conversation involving his parents in the kitchen at “Property G” (in approximately 2003/2004) in the course of which Mr Bishop’s Mother, so Ms Bishop contends, said words to the effect that the remaining sum owed to them was not expected to be paid back.[6]
[5] A copy of those partnership accounts is Annexure A to Mr Bishop’s affidavit filed on 30th January 2009 (affirmed 23rd January 2009).
[6] Transcript (23rd February 2009) pp.24-25.
Although the conversation with Mr Bishop’s Mother (in Mr Bishop’s presence) only came to light during the trial, the contention of the debt being “forgiven” had been formally raised in the affidavit material filed. I have no reason not to accept Ms Bishop’s account of events.
That said, I accept Mr Nash’s submission that, if I adopted this course of the debt being “forgiven”, it should, thereby, be taken into account as another contribution on the husband’s side of the ledger.
The final area traversed in cross-examination related to an application to the Rural Assistance Authority for finance for a bore. She readily accepted that she had filled in the application form. She confirmed that although she and Mr Bishop had separated under the one roof in late 2006, she recognised the need for water on the farm and assisted in filling in the application form for Mr Bishop. She disputed that this constituted any acknowledgment that it was a debt jointly incurred. She insisted that the application was not a “joint enterprise.”[7]
[7] See Transcript (23rd February 2009) pp.18-23.
This evidence regarding whether the application for funding of a bore was intended to be a joint liability was not formally challenged in cross-examination of Mr Bishop, although it was challenged in his affidavit material.
For my part, among other things, given the state of the marriage and the time at which the application was lodged, namely after separation (albeit while the parties still lived under the same roof), I accept
Ms Bishop’s account in relation to the debt concerning the bore. Accordingly, that debt of $25,000 should not be treated as part of the “asset pool.” It was a debt incurred after the date of separation.
Mr Bishop’s Evidence: The first part of Mr Bishop’s cross-examination focussed on the financial losses incurred in his farming business because of the drought. That led into a discussion about, and ultimately, some agreement concerning, the importance of Ms Bishop’s income from her [occupation omitted]. The importance of that income was relevant, among other things, to the bank approving a loan. Moreover, Mr Bishop acknowledged that it was Ms Bishop who prepared the cash-flow for the farm (which included the income from her [occupation omitted]) for submission to the bank and its consideration of the loan application made by Mr and Ms Bishop for the farm.[8] The loan was for $100,000.
[8] See Transcript (23rd February 2009) pp.34-35.
Mr Bishop contended that ultimately the decision of the bank to approve the loan was not determined by Ms Bishop’s income. He may be correct in that statement. However, he did not give any reason or basis for it.
In a small number of respects, Mr Bishop’s evidence on this matter, as with a few others, gave the impression that he wished to under-play, albeit slightly, the contributions to the marriage by Ms Bishop. It gave me the impression that he was, and understandably so, genuinely concerned to do all he could to ensure that he could keep the farm. He said as much towards the end of his evidence.[9]
[9] See Transcript (23rd February 2009) pp.39 & 41.
I have already noted Mr Bishop’s evidence in relation to his state of health and his work skills. In relation to the latter he confirmed that he still held a licence to drive a semi trailer and articulated vehicle as well as to operate a bus, although he did not have the requisite accreditation at the moment to drive a bus. He readily conceded that he could get it, that it would cost a bit of money (approximately $500), but that also assumed that he wanted to drive a bus – which he did not. He wanted to remain working as a farmer.
The final matter addressed in cross-examination concerned employment options for Mr Bishop on other properties, that is to say, in the event that Property G had to be sold to pay out Ms Bishop. He stressed however that he wished to remain self-employed.[10]
[10] It is sufficient for current purposes in relation to this aspect simply to refer to the brief section of the Transcript (23rd February 2009) pp.38-40.
Tax Debts: Before getting to the final form of the asset pool I need to address the issue of the individual tax debts that materialised after the conclusion of the trial and which were the subject of written submissions. As I have already indicated, Mr Nash submits that these debts should “lie where they fall,” namely on the individuals (and the partnership) to whom and to which the assessments have been issued. Mr Brzostowski submits that they should be included in the asset pool.
The tax returns for each of the parties were provided to the Court, as was the return for the partnership, “[Mr & Ms Bishop]”. Ms Bishop also provided a copy of her assessment. The returns relate to the tax year 2007-2008. The income earned related to the sale, in 2007/2008, of certain farming partnership assets.
Having particular regard to the comments of the Full Court in L & L,[11] on the evidence before the Court it is patent that the returns do not relate to matters that are post-separation. Therefore the two tax debts, of $21,939 and $9,051 respectively, should be included as liabilities in the asset pool.
[11] [2005] FamCA 335, especially at [16] and the cases there cited.
I move to the property equivalent of the “legislative pathway” in children’s cases, namely “the four steps.” As described by the Full Court in a number of cases, those steps are:
(a)To identify and value the net property of the parties (usually at the date of trial);[12]
(b)to consider the contributions of the parties within paragraphs (a) – (c) of s.79(4);
(c) to consider the s.75(2) factors; and
(d)to consider whether the order proposed is just and equitable.”[13]
[12] Although it was suggested by Mr Nash that an “asset by asset” approach was appropriate in this matter, apart from dealing with Ms Bishop’s inheritance as a discrete item (cf. Bonnici & Bonnici (1992) FLC ¶92-272), I propose adopting a “global approach.” See Norbis v Norbis (1986) 161 CLR 513. Given the relatively modest amount of superannuation involved, about which figures there is agreement, it is also appropriate to treat the superannuation as part of the one pool. Cf.C & C (2005) FLC ¶93-220.
[13] This is the `four-step’ process as described in AJO & GRO (2005) FLC ¶93-218, at p.79,619. More fulsomely, in In the Marriage of Hickey (2003) 30 Fam LR 355, the Full Court of the Family Court (Nicholson CJ, Ellis & O’Ryan JJ) said (at p.370 [39]): “First, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, the court should identify and assess the contributions of the parties within the meaning of s. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the court should identify and assess the relevant matters referred to in s.79(4)(d), (e), (f) and (g), (the other factors) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances.”
D. The asset pool
Save for the few items to which I have referred and indicated my ruling in relation thereto (i.e. the “forgiven” debt to Mr Bishop’s parents to be treated as a “contribution” by the husband; the loan for the bore is to be excluded as a post-separation debt; the inheritance to Ms Bishop is to be treated as “money in and money out”; and the tax liabilities to be included in the asset pool), the asset pool is otherwise largely agreed. In table form, it is set out below in the light of what is agreed and according to my rulings.
Assets Value Liabilities Value Property G $949,500.00 Wife's Tax debt $21,939.70 Cash from stock sales $121,500.00 Husband's Tax debt $9,051.80 Wife's inheritance $207,336.52 Farm machinery $19,500.00 Utility $14,000.00 Land Cruiser add back $3,500.00 Dog trailer $3,000.00 AWB Shares $7,396.98 IAG Shares $1,454.32 Wife's Superannuation $80,288.06 Husband's Superannuation $26,301.80 Partnership Acc $271.56 TOTAL $1,434,049.24 $30,991.50 NET ASSETS $1,403,057.74
E. Contributions
The issue of contributions might be put somewhat broadly this way. First, in relation to financial contributions, at the outset of the relationship it is clear that Mr Bishop brought more to the relationship than did his wife. It principally comprised property and some farm stock.[14]
[14] In the assessment and determination of contributions I am mindful of the Full Court’s observation in Zyk and Zyk (1995) FLC ¶92-644 at p.82,517 where the Court said: “How and to what extent that exercise is to be done is a difficult problem and one which is not susceptible of precise analysis.” A similar observation was made by Pawley SJ in Hayne & Hayne (1977) FLC ¶90-265 at p.76,415: “In matters such as this one cannot approach the problem with an eye for meticulous detail. It should rather be dealt with broadly so that the end result can be said to be just and equitable.” Finn J made similar comments in Farmer & Bramley (2000) FLC ¶93-060 at p.87,947 [49].
Secondly, over the course of the next 24 years until separation, it is indisputable that both parties contributed significantly to the relationship. It seems almost trite to describe so summarily those contributions, over such a long period of time, as being, for example, on Mr Bishop’s side, his labour on the farm, and on Ms Bishop’s side, in her responsibilities as Mother of the three children and home-maker, as well as her contributions on the farm (physical and book-keeping) and through her income from [occupation omitted], at various times.
In Garrett & Garrett,[15] the Full Court (Evatt CJ, Lindenmayer & Strauss JJ) rightly and most fairly made the following point, which applies directly (in my view) to the facts and circumstances of this case:
Where as here parties were married and cohabited for 22 years, brought up 2 children and devoted their resources and incomes to the benefit of the family as a unit, it is impossible to have a detailed accounting concerning the amounts of their respective financial contribution.
… The wide and indefinite terms of para.(a) [of s.79(4)] themselves suggest that where appropriate, and certainly in a case like the present, a broad estimate of the financial contribution of each party must be made. Under s.79(4)(b) non-financial contribution of each is to be taken into account. This must of necessity be a matter of judgment and not of computation. Similar indications can be found amongst the relevant matters in s.75(2). It is worth noting that para.(a) and (b) refer to the “contribution” and not to the contributions of each party.
[15] (1984) FLC ¶91-539 at pp.79,371 & 79,372.
Working backwards, I am content, as was submitted, to treat the non-financial contributions during the relationship as essentially equal.[16]
[16] See, for example, Mr Nash’s submissions in this regard at Transcript (23rd February 2009) p.57.
In relation to the initial contributions, the issue is whether the initial financial contribution by Mr Bishop should be treated as having, in effect, been “eroded” over the long period of the relationship, or whether, as a matter of “weight”, it should – or should not - be taken as of such large moment, given the very long relationship.
If I understood him correctly, as submitted by Mr Nash, the observations of the Full Court in Pierce, are the most germane. There the Court said, at [28]:[17]
In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution. In the present case that use was a substantial contribution to the purchase price of the matrimonial home.
[17] In the Marriage of Pierce (1998) 24 Fam LR 377 at pp.385-386.
Mr Nash submits that it is not a case of erosion of Mr Bishop’s initial contributions but rather that appropriate “weight” be given, even at the end of the relationship, to those initial and significant contributions. In urging on the Court this interpretation and application of principle, Mr Nash also noted that his submission relying on Pierce should be preferred to the approach adopted by a different Full Court in Bremner,[18] where the Court (Nicholson CJ, Baker & Tolcon JJ) seemed to prefer the terminology and principle of “erosion” of initial contributions over a long period of time.
[18] Bremner & Bremner (1995) FLC ¶92-560.
Curiously or not, the Full Court in Pierce, at [25] and [26], referred approvingly to both Bremner and the decision of Fogarty J in Money,[19] the latter case also being relied upon by the Full Court in Bremner, at pp.81,588 – 81,589. Thus, it may be argued that the distinction between “weight” versus “erosion” is either one of degree (or discretion) or, in the end result, one more of semantics. For my part, I think it is more a question ultimately of discretion. In some cases “erosion” will more appositely apply; in others, “weight” will be more appropriate. While in still more, both understandings or words will be necessary to deal with the ultimate discretion to be exercised and decision to be made. In this case, I think both words and “approaches” are relevant.
[19] In the Marriage of Money (1994) 17 Fam LR 814.
For his part, Mr Brzostowski submitted that, among other cases the Court should follow, were the New South Wales Court of Appeal judgment in Bilous v Mudaliar.[20] There the Court held, at [55], that the “erosion” principle that operated under the Family Law Act had no application under the statutory regime in NSW set out in the Property (Relationships) Act 1984 (NSW).
[20] (2005) 65 NSWLR 615.
Mr Brzostowski’s focus was on maintaining that even if the initial financial contribution favoured Mr Bishop, because of the significant contributions of Ms Bishop over the life of the relationship I should, ultimately, make findings of equal [financial] contributions.
On the limited evidence before the Court, and having regard to the principles set out in both Bremner and Pierce, I am of the view that the contributions of the parties over the life of the relationship should be treated as equal.
F. Section 75(2) factors
Under this heading Mr Brzostowski urged me to make no adjustment of any kind for either party. For the reasons that follow, I do not accept that submission.
Mr Nash sought an adjustment in his client’s favour of seven per cent (7%) under this heading. I accept that there should be an adjustment in Mr Bishop’s favour, but not quite in that order.
I accept that Ms Bishop has (a) security of employment and therefore security of income; (b) the greater amount of superannuation; and (c) the benefit of the funds she received under the inheritance, which are now held in a trust that is under her control, in every respect. She also has the care, responsibilities and educational costs of the youngest child of the relationship.
On the contrary, Mr Bishop does not enjoy those matters, especially the security of income. That is very much dependent on the weather and the vagaries of the seasons. That said, given his wide skill-set he would, if he so wished, be able to secure employment on other properties, which could include accommodation. It is his preference, for life-style and other reasons, as I have noted, to remain self-employed.
Having regard to the matters I have noted in these reasons, in my view an adjustment should be made in Mr Bishop’s favour under s.75(2) of 5%.
G. Just and equitable conclusion
It remains to consider whether the above analysis, when considered in toto, brings the Court, and more importantly the parties, to a “just and equitable” resolution of their application under s.79 of the Act.
I am mindful of the Full Court’s comment in Rogers & Rogers, (quoting and endorsing Strauss J in Ferguson & Ferguson):[21]
It seems to me, that the main purpose of s.79(2) is to ensure that the Court will not alter the property rights of parties, unless it is satisfied that cogent considerations of justice require it to do so, and that if the Court decides that it is requisite to make any order under the section, the Court must be satisfied that the alterations so ordered, will go no further than the justice of the matter demands.
[21] Rogers & Rogers (1980) FLC ¶90-874 at p.75,539; Ferguson & Ferguson (1978) FLC ¶90-500 at p.77,615
I accent, in particular, the Court’s emphasis on there being “cogent considerations of justice” before there is any alteration of property rights.
In my view, the amount sought by Ms Bishop of $419,000 is too great, for the reasons I have given.[22] Likewise, I do not think that the figure proposed to be paid by Mr Bishop to his former wife of $150,000 is just or equitable in all of the circumstances. In this regard I recall and pay particular heed to the comments by the Full Court (Ellis, Finn & Mushin JJ) in Russell & Russell.[23] At [80], the Court said:
In our view, because of the impact which the amended orders would have on the wife's financial position, the making of those orders must be said to have required an independent exercise of discretion. Furthermore, it must be remembered in this regard that under s.79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties' assets. Indeed we take the opportunity to emphasise that in what his Honour has termed "the fourth stage", that is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered. (Emphasis in original.)
[22] I note that in her original Application, filed on 24th January 2008, Ms Bishop sought payment of $385,000.
[23] (1999) FLC ¶92-877.
In (a) the light of the specific orders sought by the parties, (b) the circumstances of the case, and (c) as indicated by the Full Court in Russell & Russell, I think it is preferable to order a specific sum rather than to speak, or to make an order, in percentage terms. Accordingly, in my view, the just and equitable sum to be paid by Mr Bishop to
Ms Bishop is $290,000. I should also note, which is reflected in the orders, that Mr Bishop should have a reasonable time within which to raise the necessary funds to pay out his former wife. In the absence of agreement with Ms Bishop in writing for a longer period, Mr Bishop should be allowed sixty (60) days to raise the requisite funds, failing which the farm Property G will have to be sold in order to procure the necessary funds to pay out Ms Bishop.
As already indicated, the inheritance of (approximately) $207,000, already under Ms Bishop’s custody and control, is to remain so. Likewise, as agreed, Mr Bishop is to pay Ms Bishop $13,917 in relation to a cropping adjustment. Each party should retain their respective superannuation entitlements. Otherwise I make orders as set out at the commencement of these reasons.
In the absence of any application within 28 days of the date of these orders, each party should pay their own costs.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of Neville FM
Associate: J. Curtis
Date: 18 September 2009
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