BOOTH & BOOTH

FAMILY COURT OF AUSTRALIA

BOOTH & BOOTH

[2015] FamCA 989

FAMILY LAW – PROPERTY – Adjustment of property – long marriage – bequest during marriage – impact of interim order – contributions after separation – future needs – commercial property of parties had been contaminated by fuel leaks and was remediated

Family Law Act 1975 (Cth)

Stanford v Stanford [2012] HCA 52; (2012) 293 ALR 70
Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Bevan & Bevan (2013) FLC 93-545
Chapman and Chapman [2014] FamCAFC 91

APPLICANT:

Mr Booth

RESPONDENT:

Ms Booth

FILE NUMBER:

AYC

468

2010

DATE DELIVERED:

11 November 2015

PLACE DELIVERED:

Hobart

PLACE HEARD:

Melbourne

JUDGMENT OF:

Benjamin J

HEARING DATE:

22, 23 & 24 September 2015 and final submission of an agreed fact dated 19 October 2015.

REPRESENTATION

COUNSEL FOR THE APPLICANT:

In person

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT:

Mr Hutchins

SOLICITOR FOR THE RESPONDENT:

Richmond & Bennison

Orders

The order made August 2014 appointing the wife as receiver of the rents and profits in respect of property E Street, F Town (‘the E Street property’) is discharged as and from the date of this order.
In the event that within one (1) calendar month of the date of these orders, the husband executes and forwards to the wife the Deed of Release[1] between the parties and G Pty Ltd (‘the Deed of Release’), then in that event this Order provides to the husband an option to acquire the wife’s interest in the E Street property. Nothing in this Order imposes any obligation on the husband to execute the Deed of Release, other than voluntarily.
[1]Deed of Release referred to in the letter from the lawyers for G Pty Ltd dated 1 July 2015 – Exhibit H5.
In the event that the husband executes the Deed of Release in accordance with Order 2 above, the husband may acquire from the wife her interest in the E Street property provided:-
(a)the husband gives written notice to the wife within six (6) weeks from the date of these orders that he wishes to acquire the E Street property;
(b)within four (4) months from the date of these orders the husband pays to the wife the sum of $350,097.69, by way of property order;
(c)within four (4) months from the date of these orders and pursuant to the interim property orders made 16 December 2013, the husband pays to the wife the sum of $17,857.57 plus $776.42 per calendar month (or a proportional adjustment if less than full months) from 17 November 2015 until the E Street property is transferred to the husband;
(d)the husband secures a written release for the wife from Quikfunds to the extent of her liability;
(e)the husband pays all the outstanding Council rates on the E Street property the payment of all outstanding rates and arrears including those the subject of litigation in respect of the E Street property;
(f)the husband pays all outstanding Child Support arrears, currently about $9,203; and
(g)the husband secures a discharge of the mortgage to National Australia Bank of about $147,000 or the wife’s release from her personal covenants under the mortgage.
At the same time as the husband complies with Orders 2 and 3 above the wife shall sign all documents and papers to transfer her interest in the E Street property to the husband and the husband shall indemnify the wife in respect of all liabilities in regard to the E Street property including, but not limited to, rates, mortgages and loans secured over that property, land tax and capital gains.
In the event that the husband does not sign the deed of release or comply with Order 2, then the parties shall do all acts and things to cause the E Street property to be sold subject to the following:-
(a)the parties will appoint a solicitor to act for them on the sale of the E Street Property, with such solicitor as agreed between the parties or failing agreement as is appointed by the President of the Law Society of New South Wales at the request of either party;
(b)the parties will list the E Street Property for sale by public auction with a real agent and auctioneer agreed by the parties or failing agreement as is or are appointed by the President of the Real Estate Institute of New South Wales at the request of either party;
(c)the reserve price for the purpose of such auction will be as agreed by the parties in writing within fourteen (14) days after the date upon which the E Street Property is first listed for sale or in the absence of such agreement the reserve will be as determined by a real estate valuer appointed President of the Australian Property Institute at the request of either party;
(d)in the event the bidding at the auction does not reach the agreed or determined reserve price the parties may negotiate with the highest bidders or any other interested person and must agree to a sale of the E Street Property at a price which is not less than 5 per cent below the reserve price;
(e)if the E Street Property remains unsold, the parties do all acts and things and sign all documents necessary to immediately relist the E Street Property for sale by public auction, on a date nominated by the said agent and with a reserve being as agreed by the parties or if they are unable to agree then 85 per cent of the value determined pursuant to 5(c) above.
On settlement of the sale of the E Street Property the proceeds of sale be paid in the following manner and priority:-
(a)all legal expenses of sale, including legal costs and disbursements, real estate agents fees and commission, valuers fees and auction expenses and also including any fees associated with appointment of solicitor, real estate agent and/or valuer, valuation costs and fees on discharge of any mortgage;
(b)outstanding and adjustment of any council rates, water rates and land tax on the E Street property;
(c)to the wife the sum of $350,097.69 pursuant to Order 1(b) of these Orders;
i.plus a sum calculated as being 55 per cent of the difference between the sale price (less the costs of sale referred to in (a) above) and $750,000, if the contract sale price is more that $750,000; or
ii.less a sum calculated as being 55 per cent of the difference between the sale price (less the costs of sale referred to in (a) above) and $750,000, if the contract sale price is less that $750,000.
(d)to the wife the sum of $17,857.57 plus $776.42 per calendar month (or a proportional adjustment if less than full months) from 17 November 2015 until the sale of the E Street property is completed (pursuant to the interim property orders made 16 December 2013);
(e)the amount due to secure the release of the wife from the Quikfunds liability, presently asserted by the wife to be about $7,150;
(f)to the wife all outstanding Child Support arrears, currently about $9,203.
That pending the payment or completion of the sale of the E Street property:-
(a)the husband have the sole right to occupy the E Street Property, but shall cease occupation one week prior to the settlement time set out in the contact for sale of the E Street property;
(b)the husband pay all instalments pursuant to the mortgage and all rates, taxes and outgoings of the E Street Property as they fall due;
(c)neither party encumber or further encumber the E Street Property without the written consent of the other party or prior order of the Court.
The husband indemnify the wife in respect of:-
(a)any loan due by her to the Booth Family Trust;
(b)any liability she may have to G Pty Ltd arising from the parties occupation of the E Street Property; and
(c)any liability with I Pty Ltd.
The wife do all acts and things and sign all documents required to resign from any office holding she may hold in:-
(a)J Pty Ltd;
(b)The Booth Family Trust; and
(c)The Booth Partnership.
That the wife retain free from any claim by the husband:-
(a)the motor vehicle;
(b)her superannuation; and
(c)her chattels and other items of personal property.
That the husband retain free from any claim by the wife:-
(a)J Pty Ltd;
(b)the Booth Family Trust;
(c)the partnership Booth;
(d)the plant and equipment at the main property;
(e)his chattels and other items of personal property; and
(f)his superannuation.
That unless otherwise specified in these orders:-
(a)each party be solely entitled to the exclusion of the other to all property, including choses-in-action, in the possession of such party as at this date;
(b)each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(c)all insurance policies to become the sole property of the beneficiary named therein;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders and in the case of the wife her liability to her parents; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
The husband shall do all acts and sign all documents to cause the liability of the wife to the Booth Family Trust of $42,907.25 to be extinguished and the husband shall pay or indemnify the wife in relation to any taxation or other revenue liability arising by reason of such extinguishment.
All extant applications (except costs applications) are otherwise dismissed.
Any application for costs of all or part of the first instance proceedings (and including any reserved costs not otherwise dealt with in these proceedings) to be made in accordance with the Family Law Rules 2004 (Cth).
Following the expiration of the appeal period, all subpoenaed documents (except for the parties’ case summaries and expert reports) shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.

IT IS CERTIFIED

Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Booth & Booth has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: AYC 468 of 2010

Mr Booth

Applicant

And

Ms Booth

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

Mr Booth (‘the husband’) and Ms Booth (‘the wife’) are involved in property litigation arising out of the breakdown of their marriage.
The parties had entered into previous consent property orders but the implementation of those orders was frustrated and the orders were set aside pursuant to Part VIII of the Family Law Act 1975 (‘the Act’) in December 2013. The parties owned real estate from which the husband conducted his business as a tradesman and from which G Pty Ltd (‘G Pty Ltd’) at one stage operated a retail business. Unfortunately, fuel leaked from some underground storage facilities and contaminated the surrounding soil and groundwater. As a consequence of that ground contamination the property had no value until the problem was remediated. That work has now been completed and the real estate now has reacquired a value.
The wife seeks an adjustment of property on the basis of 60 per cent to her and 40 per cent to the husband, and consequential orders as set out in the case outline prepared by her legal advisors.
The husband seeks an order that the parties’ property be divided on the basis of 60 per cent to him and 40 per cent to the wife.
In these proceedings the wife was instructed by a solicitor and material was prepared by an apparently competent legal practitioner. The husband was acting for himself and as such, from time to time, struggled with the proceedings. I have given weight to those circumstances in this determination.

BACKGROUND

The husband is aged 51 and he is qualified tradesman, and he earns a living in that occupation. The amount of that income is unclear. He asserted that he has some health problems but intends to continue working his business. The husband adduced no expert evidence as to his health, although, he said that there was some possible problem arising out of the contaminated land which may have some impact upon him. Given the lack of expert evidence, I gave that amorphous assertion little weight. The husband claims that he has developed skills in remediating land affected by fuel contamination which will enable him to earn unspecified income in that endeavour.
The wife is aged 48 and works full time as a public servant.
The parties married in 1990 and at that time they had had already purchased a joint property in H Street, F Town.
There are three children of their marriage namely Mr B, aged 22, Ms C, aged 20, and D, aged 17.
The parties bought and sold various properties during the course of their marriage and in December 2000 purchased a business at E Street F Town (the ‘E Street property’) for about $250,000. From this property the husband operated business as a tradesman and the parties let the retail sales business to various companies. The first of these companies was G Pty Ltd who had or did install storage facilities.
One and/or other of storage facilities leaked contents into the surrounding soil and groundwater. In 2008 the Environmental Protection Agency of New South Wales inspected the property and issued a ‘Significantly Contaminated Land Declaration’ (‘the Declaration’) as to the E Street property.
In 2008 the wife commenced employment with the Australian Taxation Office.
In August 2010 the parties separated under the same roof and in November of that year the wife vacated the former matrimonial home in, F Town (‘the former matrimonial home’).
In late November 2010 the wife commenced proceedings in the then Federal Magistrates Court at F Town and in December 2010 she secured an order for sole occupation of the former matrimonial home for herself and the children. The wife also applied for child support around this time.
The parties owned the E Street property as joint tenants, and continue to own it in that way. As such income on the land accrues to them as a partnership.
The parties operated the business through a family trust called ‘The Booth Family Trust’ and the trustee of that trust is a company called J Pty Ltd (the ‘Trustee Company’). The trust was created in about 1997.
The wife transferred her shares in the Trustee Company to the husband in January 2012. He has been operating the business and trust since that time.
On 21 February 2011 final orders were made in the then Federal Magistrates Court at F Town. These provided that the parties seek a release from the National Australia Bank of the mortgage registered over the former matrimonial home owned by the parties and the transfer of the home to the wife. The orders otherwise provided for the sale of the properties if the National Australia Bank would not release the security. The net proceeds of sale were to be divided 60 per cent as to the wife and 40 per cent as to the husband. These orders were made by consent.
The National Australia Bank would not release the security of the former matrimonial home and eventually that home was sold to pay out part of the mortgage, which also secured for the Bank the E Street property.
G Pty Ltd, who had at one time operated the business, had by that time agreed to remediate the soil contamination problem at the E Street property. Their management plan was approved by the Environmental Protection Agency.
The parties’ marriage was dissolved by order of the then Federal Magistrates Court in October 2012.
In August 2012 the husband commenced proceedings to have the consent property orders set aside and that order was set aside on 16 December 2013.
At the same time orders were made that the husband pay to the wife, by way of interim property orders, some monies given the circumstances between the parties and G Pty Ltd. The wife has not been paid that sum despite the terms of that order. The wife claims that the money payable to her, pursuant to that order, amounts to some $26,105. By joint notice of agreement signed by the parties and dated 16 October 2015[2] the parties agreed as a fact that the amount the husband paid on the mortgage over the property between December 2013 and 24 September 2015 was $54,890.52.
[2] Which agreed evidence, I have admitted into evidence as ‘Exhibit W13’.
The children remained in the primary care of the wife upon separation and child support was to be paid by the husband, however, it became substantially in arrears. The husband sought to have the child support payments stayed. On 23 June 2014 an order was made in the Federal Circuit Court staying the then recovery of the child support arrears until the finalisation of the property proceedings.
On 18 August 2014 the wife sought to be and was appointed receiver of the E Street property given the matters set out in the wife’s affidavit regarding the interaction between the parties and G Pty Ltd.
On 4 August 2015 the Environmental Protection Agency notified the parties of the removal of the Declaration regarding the contamination of the land at the E Street property.
G Pty Ltd expended a significant amount of money on remediating the E Street property. Although the precise amount of that expenditure by G Pty Ltd is not known by the parties, they believe it could be up to or over one million dollars. The husband asserted that in 2014 and/or 2015 he undertook a different remediation process involving the use of hot water and soap, which he claimed had the effect of remediating the property over a period of about six months rather than over many years.
In any event the property is now remediated to the satisfaction of the State Environmental Authority.
G Pty Ltd seek that the parties execute a Deed of Release. The wife is prepared to execute that deed. The husband opposes executing that deed given his concerns about his health.
In these reasons any statement of fact is to be regarded as a finding of fact unless the contrary is clear from the context of the statement.

THE EVIDENCE

The husband

The husband relied upon:-
(a)his application in a case filed 18 September 2015 as setting out the orders he wanted. It was more of a submission than a request for final orders;
(b)his affidavit sworn 16 September 2015 and filed 18 September 2015; and
(c)his financial statement dated 14 December 2014.
The husband’s evidence was at times troubling. Some examples of this were that he said that he had sent his documents to the Court some time ago but that they had been ripped open and sent back and that as a consequence he could only file them shortly before the hearing. He could provide no plausible explanation as to why it was that they were sworn on 16 September 2015.
In his opening the husband said that the reason he did not want to sign the Deed of Release to G Pty Ltd was because he believed he had a claim against G Pty Ltd for the remediation work which he undertook. In evidence the husband confirmed this and added that he had a health difficulty, which he had trouble explaining and of which he had given no notice to the wife or those advising her.
The husband said that despite the certificate from the Environmental Protection Agency that he had discovered, in May or June, a spill of about 600 litres of diesel fuel. He did not inform the single expert real estate valuer of this but asserted that he told G Pty Ltd and the Environmental Protection Agency; notwithstanding this the Environmental Protection Agency apparently issued their certificate in any event. The husband estimated the cost of remediating this leak would be $15,000 to $20,000, but he provided no independent evidence of the cost or need for the work. I am concerned about the veracity of this evidence.

The husband said that the single expert, in preparing the valuation, did not take into account the fact that there was a lane running through the E Street property and that the shed erected on the property has an asbestos roof. Clearly those factors were taken into account in the experts report as he had valued the property at $1,020,000 and then reduced that to $750,000 given those and other concerns.
The husband did not seek to question the single expert valuer in advance of the hearing, but on the day of the hearing sought to have him available for cross-examination. When pressed during his cross-examination, the husband conceded the E Street property had a value of somewhere between $700,000 and $750,000. He later conceded to valuation by the single expert. The husband’s evidence in this respect lacked credibility and appeared to me to be more a negotiating point than an attempt to be frank.
The husband says he received inheritances from his family totalling some $94,000. He says this arose out of his parents leaving him $83,560 in cash management funds and a further sum of $11,500 from a Rams Investment. Given all of the evidence, I am satisfied that he received a significant bequest from his parents and I have taken that bequest and those sums into account in determining the adjustment of property in respect of contribution.
The husband was cross-examined in relation to the payment of the money to the wife pursuant to the interim property orders of 16 December 2013. The husband obfuscated in relation to those questions and would not give an accurate or responsive answer.
The husband answered questions with questions and at one stage I needed to warn him about being responsive to questions.
In terms of the remediation, the husband described his involvement and work. He said it was of great value, although, that work was not seen as overly valuable by the single expert valuer in the context of his report.[3]
[3] Exhibit W2 – page 78.
The husband collected data in terms of the remediation of the site, but perversely would not provide the information to G Pty Ltd. The husband was paid $22,000 to dispose of product from the remediation, which he retained. The husband asserted that over a six month period he removed 713 litres of waste product from the soil and groundwater and that G Pty Ltd removed only 430 litres.
I am satisfied the husband undertook some remediation work, but not to the extent that he claims. There is an element of exaggeration with regard to much of his evidence, and as such it needs to be treated with caution.
The husband tried to depict himself as being a reasonable and sensible person. He has shown that is not necessarily the case, such as with the date requested by G Pty Ltd. Another example was that soon after separation he paid the wife $800 in relation to some work that had been done on a car. He said that that was a division of profit on that job between him and the wife. He subsequently endeavoured to have this treated as part of child support payments.
The husband asserted that he produced all of the documents and if it was not produced, it was the fault of his accountant or the wife. Leave was given for a subpoena to issue to his accountant (order 14 May 2015). The subpoena was eventually issued to the accountant, including production of the husband’s business records. Some records were produced,[4] however, there was no evidence that the husband had produced his tax returns. The husband prevaricated in terms of the production of his tax returns. In his trial affidavit the husband produced a statement from his accountant by way of a letter dated 1 July 2015 showing his taxable income for the years 2010 to 2014.[5] However, the copy tax returns were not produced. I find that the husband prevaricated or obfuscated in relation to the production of his tax returns.
[4] Exhibit W6 (formerly FI1).
[5] At page 29 of the husband’s affidavit filed 18 September 2015.
Some of the husband’s book-keeping upon which he relied in the hearing was ‘creative’. An example of this was the Schedule on pages 32 and 33 of his affidavit, the second page of which showed the payments of $175,420.60 which included approximately some $94,000 being the bequest from his parents which had been paid to him a decade, or so, earlier.
The husband was questioned about the wife’s care of the children since separation. He prevaricated and complained, but eventually conceded that the care was left primarily to her. The wife gave evidence, which I accept, that it was open for the husband to see the children but that he chose not to do so, except to a limited degree in the last few years.
Counsel for the wife submitted that the husband’s evidence, where it differs with the wife’s, should be rejected. I am troubled by the husband’s evidence particularly in some opportunistic matters such as his approach to the loan account with the company, his taxation aspects and the like, but I do not believe it has been impeached to the extent as asserted by counsel for the wife.
I was asked to have regard to items contained in the balance sheets of the companies. In the absence of any forensic evidence and given the clear evidence of the husband that he had disclosed the items, I accept that they are as they are and I did not attempt a forensic accounting exercise on behalf of the parties.
The husband received monies throughout the course of his occupation of the E Street property in terms of money from the business and in terms of income from the rug sales and the disposal of product in the remediation of the subject land.

Evidence of the wife

The wife relied upon:-
(a)her response filed 25 August 2015;
(b)her financial statement filed 24 March 2015;
(c)her affidavit sworn 16 July 2015 and filed 21 July (‘the wife’s trial affidavit’);
(d)her affidavit filed sworn and filed 21 September 2015; and
(e)paragraphs 52 to 56 of her affidavit filed 9 July 2014.
In terms of the wife’s trial affidavit, I removed the voluminous annexures from that affidavit and they were tendered as a separate document.[6]
[6] Exhibit W8.
The wife gave evidence in chief which included a useful explanation of how the retail business operated at the E Street property. The parties purchased that in about 2000 from G Pty Ltd.
After that the husband moved and operated his business as a tradesman at those premises. It has been conducted there since that time. Various companies operated a business from the site for the next 11 years. The first operator was G Pty Ltd, who installed new storage facilities. In 2011 the last operator left the site and it was not then operated as a retail business until December 2013, and then it operated in that business for a period of some four months.
The husband operated the retail business over that later period. The wife was cross-examined in relation to the closure of the retail business in early 2014. Her evidence was that she did not sign the development application for the signage nor did she seek to have the retail business shut down. That was a matter between the husband and the F Town City Council (‘the Council’). I accept her evidence in that regard.
The wife gave evidence about her signature on a development application[7]. She said the signature appeared to be like hers, but said she did not sign that form. I accept her evidence in that regard.
[7] Exhibit H13.
The wife had difficulties in dealing personally with the husband. As such, she employed lawyers, and the husband and the wife’s lawyer clashed. The wife gave evidence that many letters were sent to her lawyers and as a consequence her legal fees were quite significant. Given the wife’s application in May of this year and the application to appoint the wife as receiver, there seems is some element of truth to that complaint, although, those are matters to be determined in any costs applications that may arise at a later date. This ought not to be taken as an indication one way or the other in relation to costs.
In recent times the husband sought to facilitate another party to operate a coffee cart or van from the site. The wife sought information such as how much rent was being paid and if there was insurance. That information was not provided by the husband and he blamed the wife for the coffee cart venture not going ahead.
There was an issue in terms of contribution during the period the parties lived together about the parties having assistance by way of a house cleaner. The husband’s evidence was that the cleaner was employed for six hours per week. The wife’s evidence was that the cleaner worked for a period of two hours once a fortnight. On balance, I prefer the evidence of the wife.
The wife gave uncontradicted evidence as to the health difficulties of the parties’ daughters, Ms C and D. Ms C suffers from Asperger’s Syndrome. She struggles socially and needs routine. She is a hard worker but will need her mother’s (the wife’s) support into the future.
D has anxiety problems and has difficulty attending school. She often refuses to go to school. This was supported by evidence from the child’s school.[8]
[8] Exhibit W9
The husband has had no involvement in the children’s school care nor has he had any meaningful relationship with the children since separation. The wife’s evidence was that she did not stop the husband from seeing the children, but rather said that he chose not to do so. She was not seriously challenged on that issue, and I accept her evidence in that regard.
The wife has paid the children’s modest school fees since separation without direct financial assistance from the husband.
It is the wife’s desire that she have a three bedroom home, with an estimated cost of $400,000. She believes she can borrow $100,000 or $150,000, but does not know what the impact of the parties’ circumstances of recent years, and in particular debts, will have in that respect.
In cross-examination the wife conceded that there was at least $83,000 left to the husband by his family. On balance, I prefer the accuracy of the evidence of the husband in respect of this issue.
The wife gave evidence clearly and frankly. I generally regard her as a witness of the truth. She did not seem to exaggerate.

THE LAW

The law regarding the treatment of property has been clarified following the High Court decision in Stanford v Stanford.[9] Prior to that decision the preferred approach was the four step process as reflected by the Full Court in cases such as Hickey v Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.
[9] [2012] HCA 52, (2012) 293 ALR 70.
Following Stanford v Stanford (supra) the approach is that a Court must firstly be satisfied that before making any order it is “just and equitable”[10] to do so. Then consider what orders, if any, should be made having regard to s 79(4) of the Act.
[10] Section 79(2).
This approach was later adopted in Bevan & Bevan,[11] where Bryant CJ and Thackray J noted that the Stanford and Stanford (supra) decision:-
… serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so. [12]
[11] (2013) FLC 93-545.
[12] Ibid at para 65.
In Chapman and Chapman[13] the Full Court considered the independence of ss 79(2) and 79(4) and confirmed that Bevan v Bevan (supra) correctly stated the law in relation to the Courts consideration of s 79(2), whether the making of an order is just and equitable. At paragraph 19 of their joint reasons Strickland and Murphy JJ said:-
Section 79 demands a consideration, separately, of all of its requirements without conflation.
[13] [2014] FamCAFC 91.
However, their Honours disagreed with any intention of plurality in Bevan v Bevan, in that the Court must consider the matters in s 79(4) when addressing s 79(2) of the Act in terms of what order is to be made. To clarify, Bryant CJ said in a separate judgment:-
Whatever differences may exist as to the meaning of [84] and [85] of Bevan, I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2) …
Accordingly, the approach I will adopt, when determining a division of property, is:-
1.Identify, in the context of ordinary legal principles, the existing legal and equitable interest of the parties in the property;
2.Consider whether in the circumstances of the parties it is appropriate and just and equitable for any order to be made having regard to s 79 of the Act; and
3.To consider and take into account any contributions and other matters, as are relevant, having regard to the provisions of s 79(4) of the Act and make such order as is appropriate. It is the function of the court to consider those relevant factors in the context of what is appropriate in all of the circumstances, provided always that it is just and equitable to do so
Given the approach adopted by each of the parties, the fact that the parties had separated in 2010 and it is only now that the parties are able to define their property, I am satisfied that there ought to be a property adjustment between these parties.

PROPERTY OF THE PARTIES

Assets
The E Street Property	Joint	$750,000.00
Booth Pty Ltd (‘the business’)	Husband	$20,000.00
Booth Family Trust	Husband	$0.00
Motor vehicle 1	Husband	$4,000.00
Motor vehicle 2	Wife	$5,000.00
Husband’s NAB account …	Husband	$252.00
Husband’s ANZ accounts …	Husband	$37.00

$779,289.00
Liabilities
Mortgage on the E Street property	Joint	$147,096.29
Unpaid telephone costs (subject to recovery proceedings due to Quikfunds)	$0.00
Unpaid rates	$0.00
Parent’s loan for wife’s legal fees	$60,000.00
$207,096.29

Total Net non-superannuation Asset Pool	$572,192.71
Superannuation
Wife’s flexible Lifetime Super	$76,728.00
Husband’s Macquarie Super	$27,126.00
$103,854.00

Total net property including superannuation

$676.046.71

Booth Pty Ltd

The husband, in cross-examination, conceded that he has spent monies on various items at Booth Pty Ltd since separation which he valued at $15,000 to $20,000. I accept his evidence and will treat the value of those items and consequently the business as having a value of $20,000.

Booth Family Trust

The Trust either owns the business and its assets are included above, or have no value.

Quikfunds

The wife received a reminder notice from Quikfunds demanding payment, in relation to a telephone system which had been provided to the business. To prevent action from being taken against her wages, the wife has been paying off that debt. The wife entered into an agreement with Quikfund to pay $120 per fortnight. This agreement has operated since May 2015, and she had paid about $1,200 against that liability.
The husband provided a series of emails between himself and Quikfund[14] where he claims that he agreed to pay the liability and provided evidence confirming this in the amount of $1,500 in full satisfaction of the debt. It was not evident in the agreement, although the husband asserted it was the case.
[14] Exhibit H2.
On the final day of hearing the wife had made enquiries of Quikfund. She was told that the husband had paid an amount of $1,500 to Quikfund, but that no agreement had been reached. That was inconsistent with the husband’s sworn evidence. The husband gave evidence that he had paid that amount of money and said in cross-examination that, as it was paid, he would be content to indemnify the wife.
The wife was told the amount outstanding to Quikfund was $7,150, but said they would accept $5,800 forthwith to fully settle the debt.
The husband’s unambiguous evidence was that he had entered into an agreement with Quikfund and, as a consequence, it is a matter for him to sort out the circumstances of that agreement with that company. If the husband does not do so by the settlement then he should be responsible for the amount outstanding. The telephone system was provided to his business and he had access to it. It will need to be repaid. Accordingly, I will be making an order that if that invoice is unpaid it will be the husband’s responsibility. If the invoice is paid then it will not impact on the liabilities of the parties.
If the husband is to retain the E Street property he must secure a clear written release from Quikfund for the wife or pay out the whole of the debt prior to or at the time of the transfer of the title to him. If the property is to be sold then the debt will be paid to Quikfund from the husband’s share of the proceeds of sale.

Interim property order

An interim property was made on 16 December 2013, which provided:-
5. In the event that [G Pty Ltd] seriously objects to the proposals suggested by the husband under evidence in this court today, leave be given to the parties to request for a direction appointing the wife as receiver to enter into the contract suggested by [G Pty Ltd] of [renting the property paying] $50,000.00 per year and the remediation work.
6. In the event that the husband remains in occupation of the property, by way of interim property order, the husband shall pay to the wife half the difference of the rent that [G Pty Ltd] offered and the annual costs of operating the site including ordinary repayments of principle and interest on the mortgage, council rates and insurance.
The husband remained in occupation of the E Street property and he has not paid the council rates. Proceedings have been commenced by the Council to recover outstanding rates of about $5,994.83. Given that interim property order these rates are the responsibility of the husband. He has had exclusive occupation of the E Street property and has not paid the rates and I will structure the orders to ensure that he pays the same (plus any land tax) out of his share of the property settlement.
To undertake the remediation work, G Pty Ltd offered to rent the property and do the work. The husband wished to remain in occupation of all or part of the E Street property so he could continue to run his business. Accordingly, the 16 December orders were made to ensure that the wife had the benefit of income from the property; being one half of the difference of the rent, G Pty Ltd had offered to pay on the property, less the mortgage, paid by the husband.
G Pty Ltd had offered $50,000 per year plus rates. As such my order was designed to enable the husband to continue the operation of his business and for the wife to accrue the income she would have otherwise earnt if G Pty Ltd was in substantial occupation.
There were 21 months between December 2013 and September 2015 and as such G Pty Ltd would have paid:-
Rent – 21 months at $4,166.67 = $87,500.00
Less – mortgage paid by husband – agreed $54,890.52
Total loss = $32,609.48
Wife’s half share as joint tenant = $16,304.74
Since this time about two months have passed and added a continuing amount of about $776.42 per month, total $1,552.83. Thus the total due to the wife pursuant to that part of the 16 December 2013 order is $17,857.57.
As the husband remains in occupation of the E Street property until shortly before any sale by the parties or acquisition by the husband, he will be liable to pay $776.42 together with building outgoings such as mortgage payment, rates, land tax and the like until he either vacates the property, acquires the property or the property is sold.

Child Support

The husband obtained a stay on his child support payments, and there is some $9,203 plus accumulating child support due to the wife.
If the husband is to retain the E Street property he must pay out the whole of the child support arrears prior to or at the time of the transfer of the title to him. If the property is to be sold then the whole of the arrears will be paid to Child Support from the husband’s share of the proceeds of sale.
On 23 June 2014 the enforcement for recovery of those arrears was stayed pending finalisation of these orders by way of an order made in the Federal Circuit Court. I have had regard to that asset of the wife and liability of the husband in this determination.

Valuation of E Street property

Evidence was provided by a single expert, Mr J, (‘Single Expert Valuer’), as to the value of this property. No issue was taken as to the expertise of the Single Expert Valuer.
In his report he noted, at pages 13 and 19, the corrugated fibre cement (asbestos) roof to the workshop. He further noted the issues regarding the title and the difficulties with the Environmental Protection Agency including that unrestricted site access was not provided by [the husband] preventing continuous remediation, however that remediation, whether by the husband, G Pty Ltd or both, solved the problem. He also noted the lane and the nature of the titles of the properties.
In his assessment of the value of the property, the Single Expert Valuer said that he thought it was valued at $1,040,000 but having regard to a number of factors, reduced that to $1,020,000.
He then allowed $270,000 for removal and replacement of the asbestos roof, the removal of the old storage facilities and the purchase of the lane to which the husband referred.
During day two of the hearing the husband conceded that the value of the E Street property was $750,000 and said that he did not require the Single Expert Valuer to be available for cross-examination.

Liability by wife to trust or Trustee Company

In his trial affidavit the husband annexed a letter addressed “to whom it may concern” dated 1 July 2015 from his accountants showing a liability by the wife to the Booth Family Trust of $42,907.25.
The husband had not previously demanded repayment of that amount but during the course of cross-examination asserted that he would expect the wife to pay either that sum or half of that sum.
This seems to be a liability which occurred in the Trustee Company substantially prior to the time the parties’ separation.
If I adopt the course that the husband asserts, that is order the wife to pay that sum back, I would have to treat it as a liability in her name and an asset of the Trust. To short circuit this approach and do justice as between the parties, I will make an order that the husband indemnify the wife in respect of this loan account and in relation to any tax or revenue liabilities arising out of any extinguishment of it. The husband has had the control of this company since 2012 and it is, in all of the circumstances, an interparty liability which ought to be extinguished.

Superannuation

The wife conceded that her superannuation was $76,728.
Counsel for the wife said that I should adopt the approach set out in Weir & Weir (1993) FLC 92-338 that I assert that the husband has not made full and frank disclosure. The husband has at times impeded the process and at times slowed the process down.
However, I am not satisfied that the husband has hidden assets. It seems to me, from the evidence that the husband has endeavoured to maintain his work as a tradesman in circumstances where the business as a whole was no longer operating or operating for a short period of time and has tried to improve the contaminated land.
I will treat the superannuation as property of the wife and I have dealt with the increase in its value in terms of the contribution and other considerations.

CONTRIBUTION

The parties commenced contributing to the creation of assets prior to their marriage. The parties had been married for many years and but for the inheritance of about $94,000 in about 2000, their contributions seem to have been relatively equal. Each of the parties worked very hard throughout the marriage.
The parties parented three children, two of whom have presented with particular health, emotional and work challenges. The bulk of the parenting was left to the wife. She was also responsible for the bulk of the home duties.
At one stage the husband raised the issue of the wife suffering from depression. However, there is no evidence that this seriously impacted on her contributions. The wife worked in paid employment and worked as a book-keeper and administrator of the husband’s business.
I accept that the husband received about $94,000 from his parents’ estate in or around 2000, which funds were applied to benefit of the family.
Given the hard work of both the parties I am satisfied that their contributions up to the date of separation were equal, save and except in terms of the bequest from the husband’s family.
Following separation the husband has provided little or no practical or financial support for the children. He blames the wife in that respect, and the wife says that it was open for him to do so. Given my assessment of the relative reliability of the parties’ evidence, I prefer the wife’s version of that history. Irrespective of the cause, it is clear that the wife has had the responsibility for care of the children, including two with special needs.
The husband claims fifteen per cent for his contribution as a consequence of turning an unsaleable property into a valuable property. There was much evidence about the remediation work. Clearly significant work was undertaken by G Pty Ltd in accordance with the direction by the Environment Protection Agency. A significant amount of product was removed from the soil by G Pty Ltd. Product was also removed from the soil by the husband.
In terms of the husband’s contribution with the remediation of the land at the E Street property it is clear that G Pty Ltd were prepared to undertake that work and had been prepared to do so for quite some time. They undertook work in that respect and from the documents it is clear that the husband, from time to time, put his interest in terms of running his business ahead of that of G Pty Ltd. The example about the difficulty about fencing was but one example.
Further, G Pty Ltd was prepared to lease part of the property and pay a lease to the parties to enable the remediation work to be completed. On the evidence of the wife I accept that the husband interfered with that process.
However, the husband must be given credit for the work he did by adopting a non-approved remediation scheme. This clearly concerned the Environmental Protection Agency and G Pty Ltd; however the outcome seems to have been that the husband enabled the removal of significant quantities of contaminated product which enabled a determination by the Environment Protection Agency of August 2015 as to the land which further enables the land to be sold.
I have given some credit to the husband in relation to that work. It was work undertaken over a period of six months and assets of the parties were used to equipment and other material. I am satisfied that there was an overall positive effect as a result of the husband’s work on the property over that six month period. I have considered that in the light of his contributions post separation.
The husband has run his business as a tradesman from the site since separation. As I said earlier, in 2014 the husband endeavoured to operate an additional business from the site. That was undertaken without the support of the wife but she did not oppose it. The wife objected to signage being put up without her knowledge or consent in circumstances where she may have been liable to a fine from Council. The husband was fined for putting up signage at the site.
The husband asserted that the wife, by her actions, prevented that business from continuing. I do not accept that evidence. I accept the wife’s evidence that she did not interfere and that it was likely that the husband, of his own volition, ended that work. I prefer the wife’s evidence in that respect.
In relation to contributions during the relationship, given the wife’s hard work and significant role in parenting and home-making, often in the absence of the husband, I am satisfied, overall, that the contributions by the parties at the time of separation were equal.
Following separation the wife provided significant contribution in terms of her role in caring for the children, including her role in providing for their special needs. She has provided financially and emotionally for them. She has done so without any significant financial, physical or emotional support from the husband.
The child support arrears is clear evidence of that circumstance. However, there must be some credit given to the husband for keeping the E Street property viable so that the remediation work, whether primarily by him or G Pty Ltd, was conducted.
The husband has conducted his business from the site which is located at the E Street property. The husband has at times interfered with the process of the remediation of the land by G Pty Ltd and at times has facilitated that process. Given the matters to which I have alluded elsewhere in these reasons I conclude that the wife’s contributions since separation have been greater than those of the husband since separation.
Overall I am satisfied that contributions should be treated as to 52 per cent by the wife and 48 per cent by the husband.

OTHER FACTORS

Both the husband and the wife are in adequate health. The husband asserted that he may have some health difficulties, although no objective evidence was provided to that end.
The husband has worked as a tradesman for some time and seems to have some skills in terms of remediating land. I am satisfied he has the capacity to earn income, although I have no reliable evidence as to his actual income. Given my concerns about his evidence and having regard to his skills, I find that his income is likely to be similar to the wife, but perhaps a little less.
The wife has shown a capacity to earn a strong income in terms of her work as a public servant. She has the care for the two children, with special needs, which will continue into their adulthood. It is, of course, open for her to seek child maintenance for those adult children, however, I am satisfied that she has some obligation to support them into their adult years.
As such, I will provide for an overall adjustment property on the basis of 55 per cent to the wife and 45 per cent to the husband, given those future needs which I have identified.
I was asked to make further adjustments in relation to the husband’s assets in the business. I am not satisfied that he has hidden assets. I am satisfied that he has simply endeavoured to keep the business running and maintain the property until such time as it turned from a non-saleable property to a saleable property.
In the overall adjustment I was alert to the money due to the wife from the husband totalling $17,857.57 plus $776.42 per month, and also the asset of the wife and the liability of the husband and similarly in terms of child support arrears. I have had regard to the husband’s liability for council rates on the E Street property. I have had regard to the wife’s need to rehouse herself and the parties’ two children in terms of the adjustment.
The effect of the orders will mean that the husband will retain the E Street property with its value of $750,000 less mortgage of $147,096.29 leaving a balance of $602,903.71 plus his business ($20,000), his car ($4,000), his bank accounts ($252 and $37) and his superannuation ($27,126) leaving him with $654,318.71. This will be less the sum of $363,618.62 which he will pay to the wife. This leaves the husband with assets totalling $290,700.09.
The wife will retain her car ($5,000), her superannuation ($76,728), the liability to her parents ($60,000) plus the amount payable by the husband of $363,618.62, making her total net property of $385,346.62.
Overall I am satisfied that the outcome is in all of the circumstances, just and equitable.

I certify that the preceding one hundred and thirty (130) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 11 November 2015.

Associate:

Date: 11 November 2015

[2015] FamCA 989

11 November 2015

Key Legal Topics

Areas of Law

Family Law

Property Law

Equity & Trusts

Legal Concepts

Remedies

Costs

Fiduciary Duty

Constructive Trust

Procedural Fairness

Appeal