Cable and Cable

[2007] FMCAfam 85

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CABLE & CABLE [2007] FMCAfam 85

FAMILY LAW – Property settlement – where parties conducted a dairy farming business prior to separation – where husband worked as an electrical contractor (off the farm) prior to and after separation – where wife responsible for the running of the dairy business subsequent to separation – dispute as to value to be attributed to livestock on the dairy farm – whether wife made “admission against interest” regarding the value of livestock – whether wife should be permitted to resile from value attributed to livestock by her counsel at the commencement of the trial – whether wife's creditors should be brought into account as a current liability of the wife – assessment of total amount owing by the wife to her creditors – whether adjustment should be made to the percentage or other amount due to each party by way of contribution alone to take account of incidents of domestic violence – discussion of principles set out in Kennon (1997) FLC 92-757 – where husband failed to make full and frank disclosure of his financial position.

Family Law Act 1975 (Cth)

Af Petersens and Af Petersens (1981) FLC 91-095
A-G for the Commonwealth of Australia (Intervening) (1984) FLC 91-501
Albany and Albany (1980) FLC 90-905
Antmann and Antmann (1980) FLC 90-908
Baxendale (2006) FamCA883
Biltoft (1995) FLC 92-614
Black & Kellner (1992) FLC 92-287
Brice (2007) FamCA 170
Briese (1986) FLC 91-715
Browne v Green (1999) FLC 92-873
Chang v Su (2002) FLC 93-117
Clauson (1995) FLC 92-595
Coghlan (2005) FLC 93-220
Crampton (2006) FLC 93-269
C & C [2006] FMCAfam 744
G & G (2006) FamCA 877
Giunti (1986) FLC 91-759
Gleeson (2004) FamCA 1179
Harper & Anor (1981) 148 CLR 337
Hickey (2003) FamCA 395
Kannis (2002) FamCA 1150 (reported in (2003) FLC 93-135)
Kelly and Kelly (No. 2) (1981) FLC 91-108
Kennon (1997) FLC 92-757
Kimber and Kimber (1981) FLC 91-085
Kowaliw (1981) FLC 91-092
McMahon (1995) FLC 92-606
Mezzacappa (1987) FLC 91-853
Norbis (1986) FLC 91-712
Omacini (2005) FLC 93-218
Oriolo v Oriolo (1985) FLC 91-653
OSF & OJK (2004) FMCAfam 63
Pastrikos (1980) FLC 91-987
Pockran (1983) FLC 91-311
Reichstein (2006) FamCA 1422
Russell (1999) FLC 92-877
S & S (2005)FamCA 1304
Townsend (1994) FLC 92-569
Waters & Jurek (1995) FLC 92-635
Weir (1993) FLC 92-338
Whitely (1996) FLC 92-684

Applicant: MS CABLE

Respondent: MR CABLE

File Number: MLM 2946 of 2006

Judgment of: Walters FM

Hearing date: 8 November 2006

Date of Last Submission: 8 November 2006

Delivered at: Melbourne

Delivered on: 13 April 2007

REPRESENTATION

Counsel for the Applicant: Mr Devries

Solicitors for the Applicant: J A Middlemis

Counsel for the Respondent: Mr Puckey

Solicitors for the Respondent: Cynthia A Toose

ORDERS

1. I shall hear counsel as to the precise orders necessary to give effect to these Reasons.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of Federal Magistrate Walters delivered this day will for all publication and reporting purposes be referred to as Cable & Cable.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
MELBOURNE

MLM 2946 of 2006

MS CABLE

Applicant

And

MR CABLE

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court are the parties’ competing applications for property settlement.

2. The hearing took place during the sittings of this Court at Castlemaine in November 2006.  The trial had formally commenced during the August 2006 sittings in Castlemaine, but was adjourned to the November circuit for various reasons.  At the time of the adjournment in August, I made orders which were intended to ensure that the hearing would be ready to proceed in the November sittings. 

3. The trial was conducted over four consecutive days.  By the end of the hearing, only a limited number of matters remained in issue. 

Short history

1. The husband was born in 1957.  He is now 50.  The wife was born in 1953, and is now 53.

2. The parties commenced cohabitation in 1978, and married on

   
   25 October 1980

   . 

3. They separated on 5 February 2005.

4. There are four children of the marriage, all of whom are now adults.  J and H were born in 1981 and 1982 respectively.  S and M (who are twins) were born in 1986.

5. At the commencement of cohabitation, the wife was employed as a nurse and the husband was employed as an electrician.  They initially lived in Cohuna, Victoria.  In 1987 they purchased a dairy property in the Cohuna District.  Thereafter, they lived and worked on the property (“the farm”). 

6. Generally speaking, the parties shared the duties associated with the conduct of the farm.  At the same time, the husband continued to work as a self employed electrician.  The wife was principally responsible for the care of the children, and for home making and housekeeping tasks.

7. According to the wife, the parties “lived practically separate lives” from approximately 1998.  She “remained in the home caring for the children … and the husband chose to spend evenings in a caravan located on our property.”[1]  According to the husband, the parties’ relationship had “deteriorated over a considerable period of time and (he) had been sleeping in a caravan at the rear of the house some years prior to separation”[2].

   [1] See paragraph 13 of the wife’s affidavit sworn 26 July 2006

   [2] See paragraph 6 of the husband’s affidavit sworn 27 July 2006

8. Although the parties slept in separate parts of the property for a number of years prior to separation, the wife continued to cook meals for the husband and attend to his washing.

9. At separation, the husband left the farm.  The wife continued to live on the farm with the children (or one or more of them).

10. For approximately eight months after the date of separation, the husband assisted the wife with the conduct of the dairy business.  Thereafter (in other words, from approximately October 2005) the husband ceased his involvement in the farm and it was conducted by the wife solely. 

11. At the time of trial (November 2006) the wife continued to live on the farm and to be solely responsible for the conduct of the dairy business.  The husband was living in the town of Cohuna and working as a self employed electrician.  Neither the husband nor the wife had re-partnered.

Documents relied upon

1. The wife relied upon the following documents:

   a)her amended Outline of Case document (filed 3 November 2006);

   b)her Application filed 27 March 2006;

   c)the Information Sheet filed 27 March 2006;

   d)her affidavit sworn 26 July 2006;

   e)her financial statement sworn 24 March 2006;

   f)an affidavit sworn by the parties’ daughter, M on 26 July 2006; and

   g)an affidavit sworn by the parties’ daughter, H on 26 July 2006.

2. The husband relied upon the following documents:

   a)his Response filed 19 May 2006;

   b)his affidavit sworn 19 May 2006;

   c)his financial statement sworn 19 May 2006; and

   d)his further affidavit sworn 27 July 2006.

3. A number of schedules were handed up during the course of the trial, and a number of exhibits were tendered.

4. At the commencement of the hearing on 7 November 2006, Mr Devries (for the wife) sought to file a valuation of the stock, plant and equipment of the farm.  The valuation had been prepared by Ian

   
   

   Boyd-Law.  For reasons which I provided at the time, I was not prepared to allow the valuation to be filed.  The trial had formally commenced during the previous sittings of this Court in Castlemaine, and on 4 August 2006 I had ordered that the proceedings be adjourned, part-heard, to the sittings commencing 6 November 2006.  I also ordered that the proceedings be listed in the November sittings with priority.

5. Other orders made on 4 August 2006 included the following:

   a)The wife file and serve any further affidavits (including valuations) on which she seeks to rely by no later than 25 August 2006.

   b)The husband file and serve any further affidavits (including valuations) on which he seeks to rely by not later than 8 September 2006. 

6. There was no satisfactory explanation for the delay in filing Mr Boyd-Law’s affidavit and, as indicated above, I refused to allow it to be introduced into evidence.

7. Following his unsuccessful attempt to include Mr Boyd-Law’s affidavit in the material relied upon by the wife, Mr Devries applied for the proceedings to be adjourned.  In essence, he argued that the matter was not ready for trial.  

8. Mr Puckey (for the husband) opposed the adjournment application.

9. For reasons which I gave at the time[3], I refused to adjourn the case.  Quite apart from other considerations, I had no confidence that the matter would be any closer to being ready for trial after the proposed adjournment than it was at that time.

   [3] See C & C [2006] FMCAfam 744

Orders sought

1. In broad terms, the wife seeks orders to the effect that the parties’ property be divided on the basis of 70% to her and 30% to the husband.  According to Mr Devries, this split reflects an allowance of 60% to the wife (and 40% to the husband) on the basis of the parties’ respective contributions, together with an adjustment of a further 10% to the wife in respect of the section 75(2) factors.

2. The husband seeks orders to the effect that the parties’ property be divided equally between them.  Mr Puckey seemed to concede that the Court might be minded to award the wife slightly in excess of 50% of the parties’ property, but argued forcefully that an overall result of 70% to the wife and 30% to the husband would be “entirely out of the ball park”.

3. Of significance in the current proceedings is the fact that the wife wishes to retain the farm and the stock, plant and equipment associated with it.  The husband does not oppose the making of orders which will enable the wife to retain the farm, provided that – in the final analysis – he is awarded something approaching 50% of the value of the parties’ property.  In other words, Mr Puckey submitted that if the farm has to be sold in order to achieve justice and equity to both parties, then so be it. 

The Law

1. The general approach that should be adopted by the court in relation to a property settlement application has been described in many cases[4]. The court must first identify the property of the parties. It must then attribute a value to each item of property – usually as at the date of the hearing. Thereafter, it must assess the extent of each party’s contributions under the various sub-headings described in section 79(4) of the Family Law Act.  Finally, the court must consider the financial resources, means and needs of the parties, and the other matters set out in section 75(2) so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment take place. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means.

   [4] see, for example, Pastrikos (1980) FLC 91-987, Lee-Steere (1985) FLC 91-626, Ferraro (1993) FLC 92-335, Clauson (1995) FLC 92-595 and Whitely (1996) FLC 92-684

2. In relation to the contributions of the parties under section 79(4) generally, it has been held that a “global” approach will usually be more convenient than an “asset by asset” approach – although the application of an asset by asset approach does not (of itself) amount to an error of law[5].

   [5] see Norbis (1986) FLC 91-712

3. The section 75(2) factors are related to the process of arriving at a just and equitable result.  It follows that there may be circumstances in which the justice and equity of the case, and the specific provisions of section 75(2), support an adjustment in a party’s favour for matters which cannot comfortably be described as being of financial or economic significance[6].

   [6] see McMahon (1995) FLC 92-606 at 82,043

4. Under section 79(2), the court is required to be satisfied that the order to be made is just and equitable – and not simply that the underlying percentage division of the net value of the parties’ property is appropriate.  In other words, in the consideration of whether the overall result of property settlement proceedings is just and equitable, it is the justice and equity of the actual orders, and not of the percentage distribution, which must be considered[7].

   [7] see Russell (1999) FLC 92-877

5. One of the more recent authorities dealing with the correct approach to be applied in property settlement cases is the Full Court decision in Hickey (2003) FamCA 395, where their Honours said:

   The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79.  That approach involves four inter-related steps.  Firstly, 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.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.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.  Thirdly, the Court should identify and assess the relevant matters referred to in ss.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. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case …

6. I have previously expressed the view that the testing of any proposed orders by reference to section 79(2) is not a fourth substantive step (properly so called) in the property settlement exercise.[8]

   [8] See OSF & OJK [2004] FMCAfam 63; (2003) 179 FLR 222; FLC 93-191.

7. It seems to me that, in applying s.79(2), the Court has power to adjust the form, structure or balance (for want of a better description) of the orders that it is minded to make in order to give effect to its conclusion as to the parties’ respective entitlements after the application of the first three steps mentioned in Hickey. In other words, the determination of the proportional or other distribution or division of the parties’ property between them must necessarily be concluded before the court considers the justice and equity of the actual orders that are to be utilised to give effect to that distribution or division.

8. In Brice (2007) FamCA 170, Kay J suggested – in a passage that is clearly obiter – that section 79(2) is itself a source of substantive power. His Honour continued[9];

   If the sum of the parts created by section 79(4)(a), (b) and (c) contributions and section 79(4)(e) considerations adds up to too much or too little, then further adjustments may be made in order to meet the over-riding dictate that an order must not be made unless it is just and equitable.

   [9] At paragraph 19

9. In Baxendale (2006) FamCA 883, however, Faulks DCJ said[10];

   If the judge has properly carried out his or her functions in determining the factors under section 79(4) (including those applicable factors under section 75(2)), the result overall should be just and equitable within the terms of the Family Law Act 1975. Accordingly, if a judge on reviewing his or her deliberations in relation to the first three stages concludes that the result does not appear to accord with justice and equity, then it is likely that the earlier adjustments were wrong. This fourth stage is really a description of a judicial thought process rather than a third discretionary phase. I do not accept the proposition that there is a third discretionary phase un-associated with contributions and/or the financial circumstances of the parties (or the other matters under section 79(4)) which somehow permits a judge in accordance with his or her conception of justice and equity to vary determinations otherwise properly made in accordance with the first two discretionary assessments.

   I accept that in some cases there may be a minor adjustment required, for example to enable a cash-poor litigant to retain some real estate when he or she has no capacity to make any payment to the other party.  For my part, it seems to me that even that sort of adjustment is more appropriately incorporated into the first two discretionary phases.

   [10] In paragraphs 105 & 106

10. For the reasons that I set out in OSF & OJK (2004) FLC 93-191 (and, in particular, paragraphs 26 to 28 thereof) I prefer the analysis of Faulks DCJ in Baxendale to that of Kay J in Brice. 

11. At the end of the day, though, the precise nature of the final step or stage in the property settlement exercise is of no significance in the present case.  It is enough to record that the process involves the Court metaphorically “stepping back” to consider whether the proposed orders (arrived at after the application of the first three steps described in Hickey) are just and equitable.

Principal Issues

1. The principal issues that the Court has been called upon to determine in this matter are as follows:

   a)What is the value to be attributed to the livestock on the farm?

   b)What is the total amount owing by the wife to her creditors, and should that amount be treated as a liability when considering the identity and value of the property of the parties available for distribution between them?

   c)What adjustment, if any, should be made to the percentage or other amount due to each party by way of contribution alone to take account of certain behaviour of the husband which is said to fall within the category of behaviour described by the Full Court in Kennon (1997) FLC 92-757, and the consequences of that behaviour.

   d)What adjustment, if any, should be made to the parties’ contributions-based entitlements to take account of the section 75(2) factors?

2. A number of secondary or subsidiary issues also require consideration.  Generally speaking, they will be dealt with under the umbrella of the primary issues described above. 

The parties’ credibility and approach to the proceedings

1. I was impressed by the wife as a witness, and I find that she is a witness of truth.  She made such concessions as were appropriate in the circumstances, and there was a balance and candour in her evidence that was often missing from the husband’s evidence.  I am satisfied that she gave appropriate responses to the questions asked of her and that she endeavoured to assist the Court in that regard.  Significantly, she was prepared to give credit to the husband when it was due. 

2. The husband was not an impressive witness.  At times, he was reluctant to make concessions when it was appropriate that he do so.  At other times his answers were evasive or lacking in candour.  Further, there were times when he was unwilling to give the wife credit when it was due.

3. Examples of the type of conduct described in the previous paragraph are not difficult to find:

   a)The husband was asked about the number of hours that he worked in his electrical contracting business at various times prior to the cessation of his involvement with the farm in or about October 2005.  Although the husband’s evidence was less than clear in relation to the subject, he eventually asserted that this work occupied approximately 45 hours of his time per week, and that he was not available to work on the farm during those hours.  Notwithstanding that assertion, he was not prepared to concede that the wife was also “working on the farm on an active basis right through co-habitation”.  He attempted to minimise the wife’s contribution to the dairy farming enterprise, and to exaggerate his own role.  Thus, he asserted that the dairy farming enterprise required him to work a minimum of 40 hours per week (in addition to the hours worked in the electrical contracting business) up to 2000, and a minimum of 30 hours per week (again, in addition to the work associated with the electrical contracting business) up to approximately October 2005 – when the husband ceased his physical involvement in the farming enterprise.  The husband suggested that the wife spent her time “looking after the children”.

   b)When pressed by Mr Devries regarding the inherent unlikelihood of the farm looking after itself whilst the husband was absent from it for some 45 hours in each week, the husband endeavoured to explain that he would not always be away for an 8 hour period, and that he would come back to the farm and do what had to be done.  I reject the husband’s evidence in that regard.

   c)When questioned regarding jobs undertaken by the wife whilst the husband was absent from the farm and attending to his electrical contracting business, the husband was most reluctant to give credit where it was due.  For example, when Mr Devries suggested to the husband that the wife was obliged to monitor the cows during calving (because such an event might happen at any time during the day or night), the husband’s response was:

   There would have been times when (the wife) would have gone for a walk around the cows, yes.

   d)In response to questions from the Court, however, the husband eventually conceded that “there would have been times when (the wife) would go and monitor activities on the farm” and that “it is quite possible (that there were) plenty of those times”.

   e)In my opinion, the husband’s evidence regarding the wife’s alleged lack of involvement in the dairy farming enterprise was not credible.  As Mr Devries put to the husband (and in relation to which the husband was unable to provide a satisfactory response) the fact of the matter is that the wife accepted sole responsibility for the running of the farm from the date of separation (although the husband assisted with one of the two daily milkings and, no doubt, some chores on the farm) until approximately October 2005.  From that time until the date of the trial, the wife was also solely responsible for running the farm.  I do not accept that the wife could have taken over the running of the farm (and continued to run it successfully) if her previous practical involvement had been at the (minimal) level described by the husband.

   f)After an overnight break the husband appeared to modify his previous evidence.  In response to a question from Mr Devries seeking to clarify the husband’s evidence from the previous day, he said:

   Up until 2000 (the wife’s) prime role was as care-giver and looking after the children in the family home.  Whenever she had time she helped where she could.  My prime role was running the farm and the electrical contract business.

   g)Shortly after making the above statement, the husband conceded that he lived in Swan Hill for a period of approximately 6 months in or about 2002.  That the husband actually lived in Swan Hill (as opposed to simply working there) was not apparent from his affidavit evidence.[11]

   [11] See, relevantly, paragraph 13 of the husband’s affidavit sworn 19 May 2006.

   h)The husband’s reluctance or refusal (in his oral evidence) to give the wife credit for the work that she did on the farm seemed inconsistent with the husband’s affidavit evidence – where, for example, he said:

   I agree that during cohabitation the wife and I would share the dairy duties.[12]

   [12] See paragraph 11 of the husband’s affidavit sworn 19 May 2006.

   i)The husband also conceded during his oral evidence that the wife did all the bookwork for the farm business.

   j)During cross-examination, Mr Devries referred the husband to paragraph 16 of his affidavit sworn 27 July 2006, in which he deposed to the following:

   Subsequent to separation, the wife has retained all of the income from the dairy business.  I estimate this income to be approximately $250,000.00 for the last 12 months and approximately $110,000.00 for the 6 months prior. … I have retained the net proceeds of my electrical business which I estimate to be $31,263.04…

   k)The husband said that the word “retained” was intended to mean that the wife “had use of the entire proceeds” of the farm income and that the husband did not make any drawings from it after separation.  He then conceded that he was aware that expenses had to be met from the gross income of the farm.  The husband endeavoured to suggest that the reference to the wife retaining what amounted to the gross income of the dairy business – as opposed to the husband retaining the net proceeds of his electrical contracting business – was simply an oversight.  I do not accept the husband’s explanation in that regard and consider the contents of paragraph 16 of his affidavit sworn 27 July 2006 to be misleading.

   l)The husband was also cross-examined about the following passage from paragraph 11 of his affidavit sworn 19 May 2006:

   (After separation) the proceeds from the (farming) enterprise continued to be banked in the joint account operated by the wife and I however I had not been drawing on this account at all and the wife has reaped the benefit of all income generated from the dairy.

   m)Notwithstanding the above statement, the husband eventually conceded that the farm income has been used to meet ─

   i)Lease or hire purchase payments in respect of a panel van used by him for his electrical contracting business; and

   ii)payments in respect of the mortgage over the farming property. 

   n)When Mr Devries suggested to the husband that the mortgage was being paid off by the wife, the husband’s response was:

   It is being paid off by the income produced by the cows, yes.

   o)The above comment typifies the husband’s reluctance to give credit to the wife for the efforts that she has made in relation to the farming enterprise.

   p)Mr Devries also cross-examined the husband regarding his present income and working hours.  His answers were often vague and non-responsive.  He eventually conceded that his income could be estimated at approximately $700.00 per week (as opposed to the figure of approximately $600.00 per week appearing in his financial statement sworn 19 May 2006).

   q)The husband was also cross-examined about his Ford AU motor vehicle.  His evidence in relation to the acquisition of the vehicle was vague and difficult to follow.  It is clear, however, that the husband failed to disclose the existence of the vehicle in his financial statement ─ and, indeed, at any time prior to cross-examination.  It was eventually conceded that the car has a net value of $10,000.00. 

   r)Mr Devries questioned the husband regarding the value of the electrical contracting business.  While it was not in dispute that the business has no goodwill, no attempt was made (in the husband’s financial statement) to place values upon its other assets and liabilities.  Indeed, the husband’s estimate of his interest in the electrical contracting business was expressed to be “unknown”.

   s)The husband gave evidence (which was less than clear) regarding what are colloquially referred to as “contra” deals associated with the acquisition of his car and a refrigerator.  The husband seemed to suggest that amounts the subject of the “contra” arrangements had “gone through the books,” but then conceded that they could be added to the total receipts for the electrical contracting business for the 2005/2006 financial year.  Whatever the actual arrangements may have been in relation to these items, the husband’s evidence in relation to them was vague and unhelpful.

1. Generally speaking, extracting financial information from the husband was a very difficult exercise.  I find that the husband was reluctant to make relevant disclosures unless he felt that there was no other option.  I find that the husband was not prepared to make full and frank disclosure of his financial position – or, alternatively, that he was not prepared to make full disclosure until the dying stages of the proceedings.  The late disclosure of material such as the husband’s bank records meant that Mr Devries’ cross-examination was necessarily fragmented.  It also led to confusion when an attempt was made on behalf of the wife to summarise the various deposits appearing in the husband’s bank statements.  If the husband had been open and frank in relation to his financial position at an early stage, then the Court’s time could have been used more efficiently.

2. During the course of the trial, I referred to the conduct of the husband’s case in relation to financial matters as being “too little, too late”.  In my view, that comment adequately describes the scenario faced by the wife and by the Court.

Full and frank disclosure

1. There can be no doubt that both parties have a clear obligation to make a full and frank disclosure of their financial circumstances in a timely manner.[13].

   [13] See Reichstein (2006) FamCA 1422 at paragraph 80.

2. The duty to make full and frank disclosure of one’s financial position has been set out in a number of cases determined by the Full Court over the years. Those cases were summarised in Chang v Su (2002) FLC 93-117. Full and frank disclosure is required as a matter of principle in proceedings between spouses or former spouses under the Family Law Act (see, for example, Oriolo (1985) FLC 91-653, Briese (1986) FLC 91-715 and Giunti (1986) FLC 91-759). Where the court cannot be satisfied as to the extent of a party’s property, it can be less cautious than might otherwise be the case when making relevant orders (see Mezzacappa (1987) FLC 91-853, Black & Kellner (1992) FLC 92-287 and Weir (1993) FLC 92-338).

3. The authorities referred to above reveal that a judge (or federal magistrate) is entitled to take a “robust view” in relation to findings regarding a party’s financial position (including a party’s capacity to meet any proposed order) where that party has failed to make full and frank disclosure of his/her financial position.[14] 

   [14] See Chang v Su at paragraphs 71 an 72

4. In November 2002, the High Court dismissed an application by the husband in Chang v Su seeking special leave to appeal from the Full Court’s decision. In the course of argument, Callinan J observed:

   It does not matter what the principle might be seen to be, a Court has to do the best it can. It does the best it can, having regard to the evidence that is adduced, and if the parties are not frank then naturally there is going to be a measure of imprecision about any findings that the Court can make.

5. In Kannis (2002) FamCA 1150 (reported in (2003) FLC 93-135 – but not as to this issue) – the Full Court said:[15]

   (It was submitted that certain cases discussed in the judgment) were authority for the proposition that where there was a finding of deliberate non-disclosure the Court could act more robustly in making findings adverse to the party who had actively misled it. We do not see that the principle should be so confined.

   Whether the non-disclosure is wilful or accidental, or is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied that the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances, it may be appropriate to err on the side of generosity to the party who might otherwise be seem to be disadvantaged by the lack of complete candour…

   [15] At paragraphs 50 and 51.

6. Not only did the husband in the present case fail to make a full and frank disclosure regarding his financial position in a timely fashion, but he also ran what I described during the trial as “a negative and unhelpful case” in relation to the value of the parties’ livestock.  I shall discuss this subject in more detail later in these Reasons.

Property and Liabilities as at the date of trial

1. The first step in the property settlement exercise relates to the identification and valuation of the property of the parties at trial.

2. Subject to comments to be made later in these Reasons, I find that the parties’ property and liabilities are as follows:

Husband’s Van	$1,000.00
Husband’s Debt to Esanda	($4,500.00)
Husband’s Fairmont Motor Vehicle	$10,000.00
Husband’s Tools	$3,500.00
Husband’s Stock (Electrical)	$3,500.00
Husband’s Shed Materials	$8,990.00
Husband’s Time Share	$5,000.00
Husband’s Caravan	$2,500.00
Husband’s Superannuation	$71,346.00
Farm Property (Real Estate – Net)	$315,650.00
Farm Livestock	$18,780.60
Wife’s Car	$2,000.00
Farm Plant	$4,000.00
Murray Goulburn Shares	$14,025.00
Amount owning in respect of Murray Goulburn Shares	($15,500.00)
Farm Overdraft	($9,788.00)
Farm Creditors	($59,338.57)
Wife’s Superannuation	$19,379.00
Total	$390,544.03

1. It can be seen from the above that the total net value of the parties’ property is $390,544.03 – of which $71,346.00 comprises the husband’s superannuation entitlements and $19,379.00 comprises the wife’s superannuation entitlements.

2. It was not in dispute that the wife is to retain the farm (subject to the mortgage encumbering it), the livestock, the plant and equipment on the farm, her motor vehicle, the Murray Goulburn shares and the debt associated therewith, the farm creditors and the overdraft.  She is also to retain her superannuation entitlements.  Similarly, the husband is to retain his van (with its associated liability to Esanda), his tools of trade, his Ford motor vehicle, his electrical stock, his shed materials and caravan, and the time share unit.  He is also to retain his superannuation entitlements.  The principal issue for determination is the amount that the wife should be obliged to pay to the husband in order to achieve a just and equitable split of the property on the basis described above.  Mr Devries (for the wife) argued that the split should be on the basis of approximately 70% to the wife and 30% to the husband.  Understood in those terms, the wife’s case would involve a payment from the wife to the husband of approximately $15,825.00.

3. Mr Puckey (for the husband) argued that the split should be approximately equal.  On that basis, the wife would be obliged to pay to the husband an amount of approximately $93,935.00.

Agreed Values

1. By the completion of the trial, the values to be attributed to the vast majority of the items of property and liabilities comprising the “pool” had been agreed.  The only items in dispute were the value to be attributed to the farm livestock and the question of whether or not the farm creditors should be taken into account. 

2. In other words, all the values contained in the schedule appearing in paragraph 52 above were agreed, save for the figures for farm livestock and farm creditors.  I should add that, although the farm and the electrical contracting business had been conducted as partnerships (and although the precise structure of the two businesses after the parties had separated was less than clear), neither party suggested that the structure or style of the businesses was relevant in any way to the court’s deliberations.  In essence, the partnership structures were ignored.

Farm Livestock

1. During the course of closing addresses, I expressed the view that the husband had run “a completely negative and unhelpful case in relation to the stock”.  It was my view then, and it remains my view, that the husband made no effort to assist the Court to determine the value of this item of property.  He was content to (metaphorically) sit back and require the wife to endeavour to establish the relevant value.  And after the wife spent considerable time in the witness box dealing with the issue, she was not cross examined (or effectively cross examined) in relation to it.

2. Mr Puckey submitted that the husband’s approach as described above could be justified on the basis that the value of the livestock should be deemed to have been agreed between the parties in the sum of $80,400.00.  Mr Puckey’s submission was to the effect that the wife had adopted a value of $80,400.00 for the livestock at the commencement of the trial in August 2006, that the husband had since accepted the wife’s value and that she should not be permitted to resile from her concession in that regard.  Mr Puckey argued that the wife was “bound by the evidence that she put to the Court in the opening of the case” and that she cannot “turn around and re-invent the figures”.  

3. In my opinion, Mr Puckey’s submission in relation to this subject is misconceived.  That is so because there was never any relevant consensus between the parties as to the value to be attributed to the livestock, such as could have amounted – in some way – to a form of estoppel against the wife.  As shall appear from the matters discussed below, there is no reason why the wife should be precluded from resiling from the estimate provided to the Court on her behalf at the commencement of the trial.

Background to alleged “estoppel”

1. The proceedings first came before me in Bendigo on 22 May 2006.  Procedural orders were made by consent, programming the matter for trial in the next circuit (in Castlemaine) commencing 31 July 2006.  The parties were ordered to attend a conciliation conference, and the following additional orders were made:

   (a)Each party do exchange market appraisals or valuations of any asset in dispute no later than 14 days before the conciliation conference.

   (b)Each party send any market appraisal or valuation of any asset in dispute to the nominated organisation (being the organisation responsible for the conduct of the conciliation conference) not later than 7 days prior to the date fixed for the conciliation conference.

   (c)The wife do file and serve all further affidavits and other material to be relied upon by not later than 28 days prior to the trial.

   (d)The husband do file and serve all further affidavits and other material to be relied upon by not later than 14 days prior to the trial.

   (e)Both parties do file and serve an outline of case document in an appropriate form by not later than 72 hours prior to the commencement of the trial.

2. The Castlemaine circuit which commenced on 31 July 2006 was very full and very busy.  This matter was eventually called on during the afternoon of Friday, 4 August 2006 (being the final day of the circuit).  Mr Devries appeared for the wife and Mr Puckey appeared for the husband. 

3. Mr Devries submitted that there was “no point” in commencing the trial, as it could not be concluded in the circuit.  Mr Puckey argued that the trial should commence.  

4. The trial was eventually adjourned to the next circuit in Castlemaine (commencing 6 November 2006), with priority, but not before Mr Devries and Mr Puckey handed up to the Court schedules setting out each party’s version of the pool of property available for distribution.  The wife’s version of the pool was contained in her trial affidavit and her outline of case document, both filed on 27 July 2006 (being the Thursday before commencement of the circuit on the Monday).  The husband did not file an outline of case document.  His version of the pool was contained in his trial affidavit sworn 27 July 2006, and in a hand written schedule prepared by Mr Puckey and dated 4 August 2006.

5. The value of the livestock recorded in the wife’s schedule was $80,400.00.  The value of the livestock recorded in the husband’s schedule was $131,000.00.

6. The parties did not reach agreement as to the value of the livestock on 4 August 2006.  It clearly remained a matter that was an issue between them.

7. As indicated above, the trial was adjourned to the November sittings of this Court in Castlemaine.  The following orders were made, by consent, on 4 August 2006:

   (a)The wife file and serve any further affidavit (including valuations) on which she seeks to rely by no later than 25 August 2006.

   (b)The husband file and serve any further affidavit (including valuations) on which he seeks to rely by no later than 8 September 2006

   (c)Each party provide to the other party’s solicitors copies of any documents relevant to the proceedings which is requested in writing within 14 days of such request.

   (d)The matter otherwise be adjourned, part herd, to the Bendigo Circuit (in Castlemaine) commencing 6 November 2006 at 10.00 a.m. for final hearing, with priority (with an estimated hearing time of 2 days)

8. Notwithstanding the orders made on 4 August 2006, neither party filed a valuation of the livestock within the relevant time frame (being prior to 25 August 2006 for the wife and prior to 8 September 2006 for the husband).

9. According to Mr Puckey and Mr Devries, correspondence relating to the valuation of the livestock passed between the parties’ solicitors in October 2006, well after the time limits recorded in the order of 4 August 2006 had expired.  As I understand the submissions made to

   
   

   me:

   a)The wife’s solicitors wrote to the husband’s solicitors on 9 October 2006 indicating that the wife wished to instruct a valuer to prepare an up-to-date valuation of the livestock (and the plant and equipment), and inquiring whether the husband was prepared to agree to a “single” valuation by Mr Boyd-Law.

   b)On 15 October 2006, the husband’s solicitors wrote to the wife’s solicitors advising them that the husband “accepted the values that the wife had been proposing at that point of time of $80,400.00 (for the livestock) and $4,000.00 (for the plant and equipment)”.

   c)On 16 October 2006, the wife’s solicitors wrote to the husband’s solicitors confirming that they proposed to obtain an up-to-date valuation of the livestock.

10. None of the above letters was tendered, and I do not know whether the letter from the wife’s solicitors to the husband’s solicitors dated 16 October 2006 was in fact in response to the letter from the husband’s solicitors dated the previous day.  Suffice it to say, however, that there was no evidence of a clear ‘offer’ on the part of the wife to agree the value of the livestock at $80,400.00, or any other figure.  According to Mr Devries, the genesis of the letter dated 9 October 2006 from his instructors to the husband’s solicitors was the wife’s concern regarding the impact of the drought on the value of the livestock (and plant and equipment).  Be that as it may, there appears to be no doubt that the letter dated 9 October 2006 proposed that the parties obtain a single valuation to be prepared by Mr Boyd-Law.  Clearly, the wife (through her solicitors) was not proposing that the value of the livestock be agreed at either of the figures then before the Court.  That some form of joint approach to the livestock valuation issue would be necessary was, it seems to me, abundantly clear to both parties ─ and their legal advisers – because up to that point neither party had filed a valuation of the livestock in an admissible form.

11. Faced with the proposal from the wife’s solicitors to the effect that a joint, up-to-date valuation should be obtained, the husband’s solicitors sought to “snatch” the value now impliedly abandoned by the wife.  In my opinion, such a course of action was neither appropriate nor effective.  More importantly, it did not and could not have had the effect of fixing the value of the livestock for the part-heard trial which was due to resume on or about 7 November 2006.  Clearly, parties are entitled to update their evidence at trial.  Absent an agreed value for the livestock, each party was entitled to give evidence in relation to such matters as (for example) changes in livestock numbers and recent prices received at market.

12. Mr Puckey submitted that there were two points at which it was clear that the husband did not intend to challenge the wife’s initial estimate of the value of the livestock (being $80,400.00).  The first was when the husband chose not to file any further material between 25 August 2006 (being the expiry of the wife’s deadline for filing documents) and 8 September 2006 (being the expiry of the husband’s deadline for filing documents).  The second was the dispatch by his solicitors of their letter dated 15 October 2006 (in response to the letter dated 9 October 2006 from the wife’s solicitors proposing that a joint, current valuation be obtained).  I reject Mr Puckey’s submission in that regard.

13. The failure of the husband to file further material between 25 August 2006 and 8 September 2006 did no more than perpetuate the pre-existing dispute as to the value of the livestock.  Clearly, it was at that time that the husband could have and should have (if he was minded to do so) filed a document making it clear that he accepted the wife’s valuation figure.  The second “point” referred to by Mr Puckey (being the purported acceptance of the wife’s valuation figure in the letter dated 15 October 2006) was certainly an attempt to bring the dispute as to the value of the livestock to an end, and to avoid the need for valuation evidence, but the problem from the husband’s point of view is – to use the words that I employed during the trial – that the attempt amounted to too little, too late.  The wife’s solicitors had already flagged the fact that their client had resiled from the $80,400.00 figure.  It follows that there was no extant “offer” on their part (to accept a value of $80,400.00) which could properly or effectively be “accepted” by the husband.  Indeed, Mr Puckey conceded that the letter of 9 October 2006 made it clear that the wife would not adhere to the figure of $80,400.00, and that the husband was aware, from that date onwards, that she wanted to re-visit the question of the value of the stock.

14. The wife later obtained a valuation from Mr Boyd-Law, but, for reasons which I gave at the time, I declined to allow it to be introduced into evidence.

15. When regard is had to all the circumstances described above, it is clear that there was never a consensus between the parties as to the value to be attributed to the livestock.  It was only after the wife indicated that she had resiled or proposed to resile from the figure of $80,400.00 that the husband purported to agree that amount.  It follows that the value of the livestock remained a live issue at all times.  There was never a point in time at which both parties could fairly and reasonably have understood that the value was not a matter in issue. 

16. True it is that the valuation obtained by the wife from Mr Boyd-Law was well out of time and was rejected by the Court, but at least the wife made an effort to obtain relevant, admissible evidence and place it before the Court.  The husband made no such effort.  He could have filed a document in an appropriate form admitting the wife’s value at any time prior to 8 September 2006.  He did not do so.  He could have cooperated with the valuation process proposed by the wife’s solicitors in their letter of 9 October 2006.  He did not do so.  Given the continuing dispute as to the value of the livestock, he could have attempted to arrange his own valuation.  He did not do so.  Ultimately, the husband could have applied for an adjournment for the purpose of presenting further evidence regarding the value of the livestock.  He did not do that.  And when all else failed, he could have instructed his counsel to cross-examine the wife in relation to the evidence that she gave at trial regarding the livestock and its value.  But he did not do that either, and the wife’s evidence remained effectively untested.

1. I accept that the wife could have and should have obtained a valuation at an earlier stage than she did, and I do not ignore the fact that either party (or both parties) could have approached the Court at an earlier stage to apply to vary the timetable set out in the orders of 4 August 2006.  But the bottom line is that, in all the circumstances, it would be inappropriate and unconscionable to hold that the wife is bound, in some way, to adhere to the value that she attributed to the livestock in August 2006.

2. I also reject Mr Puckey’s submission to the effect that the $84,400.00 figure amounted to some form of admission against interest on the part of the wife.  If the husband had accepted the wife’s figure prior to 9 October 2006 (being the date of the first letter from the wife’s solicitors), then it might at least be arguable that there had been an admission against interest in some form which might preclude the wife from leading further evidence as to the value of the livestock.  But he did not purport to accept her figure until after that date, when he knew that the wife had resiled from it.

Value to be attributed to livestock

1. The value attributed to the livestock in the wife’s amended outline of case document filed 3 November 2006 was $36,600.00.  Because of the ruling to the effect that the wife could not rely upon the evidence of Mr Boyd-Law, however, the Court was left with very limited evidence as to the actual value of the livestock at the date of trial.  In those circumstances, I gave Mr Devries leave to lead from the wife (in examination in chief) limited evidence to correct any errors that may have been contained in the wife’s documents, and to update her evidence generally.  Mr Devries used the opportunity (without objection from Mr Puckey) to lead evidence from the wife to the following effect:

   a)As at the date of trial, the livestock comprised a total of 140 dairy cattle – being 52 mature cows, 29 heifers, 28 one year old heifers, 4 Autumn calves, 21 Spring calves, 3 two year old bulls and 3 one year old bulls.

   b)Of the 52 mature cows, 15 “need to be sold” for various reasons.  Generally speaking, they must be sold because it is not viable for them to remain in the herd – due to (for example) decreased production or advanced age.

   c)Clearly, after the sale of the 15 unviable mature cows, the wife will be left with 37 mature cows.

   d)The wife wishes to retain the 37 mature cows, but simply does not know whether she will be obliged to sell them in the not too distant future.  As I understand her evidence, much will depend upon the impact of the drought.  If it continues, then she will (reluctantly) have to consider selling the 37 mature cows.

   e)Of the 37 mature cows that the wife proposes to retain, approximately 70% (or 26 animals) are Jerseys and 30% (or 11 animals) are Friesians.  According to the wife, Friesians “… usually hold their weight a lot better, and they consequently get more per kilo of meat”.

   f)The wife sold a total of 7 cows through her stock agents on 24 October 2006.[16]  The 7 cows comprised 5 Jerseys and 2 Friesians.  The average sale price per head for the Jerseys was $113.80.  The average sale price per head for the 2 Friesians was $467.50.

   g)The wife conceded that the best evidence that was available to the Court of the value of the Friesians in her herd was the price per head that she obtained at the time of sale on 24 October 2006.  She explained, however, that the 2 Friesians sold on 24 October 2006 were the heaviest Friesians in her herd.  They had “turned to beef”.  The Friesians sold in October 2006 weighed 640 kilos and 650 kilos respectively.  According to the wife, the Friesians remaining in the herd would “probably average 550 kilos each”.

   h)Of the 29 heifers in the herd, the wife anticipates that she might have to sell approximately 6 that are “suspicious” (in that they may not be good milk producers).  She estimates that she would receive “under $100.00” per head for the 6 “suspicious” heifers and $150.00 per head for the other heifers – assuming that she has to sell all the animals. 

   i)In relation to the 28 one year old heifers, the wife said that:

   [16] See exhibit W1

   If I can manage it, I will retain them, but if I can’t they will also have to be sold.

   j)If they are to be sold, then the wife anticipates receiving “less than $100.00 per head”.

   k)If the 4 Autumn calves are to be sold, then the wife anticipates that she would receive $75.00 per head. 

   l)If the 21 Spring calves are to be sold, then the wife anticipates that she would receive “between $30.00 and $40.00 per head”.

   m)If the 3 two year old bulls are to be sold, then the wife anticipates that she would receive “a little bit more than $250.00 per head”.

   n)If the 3 one year old bulls are to be sold, then the wife anticipates that she would receive $75.00 per head.

2. During her re-examination, the wife said that her herd comprises 81 “milkers”.  She also said that a milking herd of that size is “average” for the farm.  In other words, and as I understand the wife’s evidence, the milking herd is neither larger nor smaller than is usually the case.

3. During cross examination, Mr Puckey elicited the following evidence from the wife:

   a)The dairy herd operates by way of annual rotation (whereby new calves are born, they mature, they are ultimately placed in calf and they then commence as a member of the milking herd).  By and large, male calves are disposed of.

   b)Not all female calves are retained with a view to them entering the herd.

   c)The sale of cows from the milking herd is “an annual event”.  During the course of the year, approximately 20 or 30 older cows would be sold to make room for 20 or 30 younger cows “coming up”.

   d)The farm can usually sustain approximately 80 milking cows, but “in a year like this” the number can come down to approximately 60. 

   e)The wife does not wish to sell the 37 mature cows because, amongst other reasons, they form the basis of her herd for the next season.  Similarly, she does not wish to sell too many of the heifers and one year old heifers either, because they will also form part of each year’s herd.

   f)Notwithstanding the wife’s wishes as described above, sales may have to be made.  For example, the wife said:

   During the last drought in 2002 we sold all our replacements.

   g)It is the wife’s desire to “hang on to” her milking cows if she can.  If she cannot, then she must sell them. 

4. Doing the best that I can with the limited evidence available (and having regard to the limited cross examination of the wife in relation to the subject), I find that the current value of the livestock – if it were to be sold at the time of trial – is as follows:

   a)The 15 mature cows that “need to be sold” were not described in any detail.  I assume that approximately 70% of them (or 11 animals) are Jerseys and the remainder are Friesians.  The average price for Jerseys sold on 24 October 2006 was $113.80.  The average price for Friesians sold on that day was $467.50.  I conclude that the total value of the 11 Jerseys is $1251.80, and the total value of the 4 Friesians is $1870.00.  In other words, I conclude that the total value of the 15 mature cows that “need to be sold” is $3121.80.

   b)In relation to the 37 remaining mature cows, these comprise approximately 26 Jerseys and 11 Friesians.  The Jerseys can be regarded as having a value of $113.80 each, or $2,958.80 for all 26.  The 11 Friesians to be retained by the wife are, however, smaller animals than the Friesians sold on 24 October 2006.  The average per kilo for the Friesians sold on 24 October 2006 was 72.5 cents.  If the 11 Friesians average 525 kilos each, then the wife could expect to receive approximately $380.00 per animal, or $4,180.00 for all 11.  In other words, the total value of the 37 mature cows which the wife would prefer to retain as part of her milking herd is $7,138.80.

   c)In relation to the 29 heifers in the herd, 6 are “suspicious” and are likely to be sold for “under $100.00”.  I conclude that they have a sale value of $90.00 each, or $540.00 for all 6.  The remaining 23 heifers have a sale value of $150.00 each, or $3450.00 for all 23.  In other words, the total value of the 29 heifers is $3990.00.

   d)The 28 one year old heifers have a sale value of “less than $100.00”.  I conclude that their sale value is approximately $90.00 each – or $2520.00 for all 28. 

   e)The 4 Autumn calves have a sale value of $75.00 each, or $300.00 for all 4.

   f)In relation to the 21 Spring calves, I conclude that the sale value would be approximately $35.00 each, or $735.00 for all 21.

   g)In relation to the 3 two year old bulls, I conclude that the sale value would be $250.00 each, or $750.00 for all 3.

   h)In relation to the 3 one year old bulls, I conclude that the sale value would be $75.00 each, or $225.00 for all 3.

5. In summary, I conclude that the value of the livestock – if it were to be sold – is as follows:

15 mature cows (ear-marked for sale)	$3,121.80
37 mature cows	$7,138.80
29 heifers	$3,990.00
28 one year old heifers	$2,520.00
4 Autumn calves	$300.00
21 Spring calves	$735.00
3 two year old bulls	$750.00
3 one year old bulls	$225.00
TOTAL	$18,780.60

1. It can be seen from the above that the total (sale) value of the livestock is $18,780.60. 

2. I have already dealt with Mr Puckey’s submission to the effect that the wife should be held to the original figure of $80,400.00.  I concluded that she should not be held to that figure.  Mr Puckey also submitted that the Court should not adopt the sale price of the livestock because the wife is not qualified to estimate the likely value of the relevant animals upon sale and because, in any event, there is no evidence that a “fire sale” will occur. 

3. I reject Mr Puckey’s submissions in relation to both of those matters.  The evidence (including exhibit W1) reveals that the wife (or the parties) has (or have) sold animals on many occasions on the past.  Such activity is clearly part of the dairy farming enterprise.  Indeed, Mr Puckey emphasised that the sale of stock is a regular and unremarkable event, and that it is necessary to dispose of certain animals in order to maintain the milking herd at a constant figure of approximately 80 animals.  I accept that the wife would have a reasonable knowledge of prices being obtained at market for the various types of animals comprising the farm herd.  As well, it was not in dispute that the wife has always been responsible for the “bookwork” associated with the dairy farming enterprise.  Further, the fact of the matter is that Mr Puckey did not object to the wife’s evidence relating to the likely sale price of the various types of animals, and he did not cross examine the wife in relation to the subject.

4. That the livestock might be sold on the basis of a “fire sale” was never put to the wife.  As I understand her evidence, the values that she gave were intended to reflect an orderly sale of the livestock in much the same way as the 7 cows were sold on 24 October 2006.  Once again, there was no cross examination of the wife in relation to this subject.

5. Mr Puckey also argued that it is inappropriate to adopt a valuation of the herd based on the sale prices of the animals comprising it when, in reality, the correct approach should be on the basis of the herd’s value “as a going concern”.  As indicated above, Mr Puckey emphasised that the sale of stock is a regular and unremarkable event, and that it is necessary to dispose of certain animals in order to maintain the milking herd at a constant figure of approximately 80 animals.  He also argued that, given that the milking herd is neither larger nor smaller than it normally is, and that there is no evidence that a sale is imminent or unavoidable, Mr Puckey submitted that the wife’s evidence relating to likely sale prices is irrelevant. 

6. The principal problem with Mr Puckey’s submissions as described above is that I was not presented with any evidence as to the value of the herd as “a going concern”.  The husband made no attempt to place relevant valuation evidence before the Court, and the entire thrust of his case in relation to this subject involved an attempt to persuade the Court that the wife should not be permitted to resile from the original figure of $80,400.00.  In my opinion, the figure that should be adopted for the value of the livestock is the amount of $18,760.60 for the following reasons:

   a)Neither party presented any other valuation evidence in an admissible form.

   b)The wife was not cross examined (or effectively cross examined) upon her evidence regarding the likely sale price for each category of livestock, and the sale of stock is a regular and unremarkable event.

   c)There was no evidence that the value of the herd as a “going concern” is or might be any different from the value derived from an analysis of the sale prices of the various animals contained within it, and such a suggestion was certainly never put to the wife.

   d)If the Court were to be unable to ascertain a value for the herd, then an available option would be to order that it be sold – in which case the sale value would clearly be the appropriate one.

   e)Although the husband does not object to the wife retaining the farm, and simply seeks that he be paid an amount of money that might be considered reasonable, he conceded that the sale of the farm is a possibility.  Mr Puckey and Mr Devries also recognised the possibility of the sale of the farm during the course of their closing addresses.  For example, Mr Puckey argued that the wife should be allowed time to pay to the husband whatever amount the Court deems appropriate, but a default provision should be drafted in a form which would require a split of any sale proceeds on a percentage basis.  Further, Mr Puckey submitted (correctly) that, at the end of the day, the Court is obliged to reach a result that is just and equitable from the point of view of both parties, having regard to all the relevant factors.  If that means that the farm must be sold, then that is what must occur.  Mr Devries, for his part, approached the possibility of the sale from a different point of view.  He endeavoured to emphasise the centrality of the farm in the wife’s life, and the significance (to her) of her desire to retain it.  He also emphasised the precariousness of the wife’s financial position, and her likely inability to meet any substantial payment to the husband without having to sell the farm.  The fact of the matter is, though, that neither party presented me with evidence regarding the maximum amount that the wife can afford to pay the husband without having to sell the farm.  Still, the recognition by both counsel that the sale of the farm is a realistic possibility reinforces the appropriateness of adopting the probable sale price as an accurate reflection of the value of the livestock – in the absence of any alternative, credible and admissible evidence.

   f)The parties’ financial statements for the year ended 30 June 2005[17] record the value of the stock at $2531.00.  The financial statements for the year ended 30 June 2006[18] record the value of the stock at $2910.00.  Although neither of these figures was explained (or cross examined upon) they reveal that the parties themselves attributed a much lower value to the livestock than that suggested by Mr Puckey.

   g)Although the wife’s affidavit and amended outline of case document filed 3 November 2006 both recorded a value of $36,600.00 for the livestock, and although Mr Devries relied upon the list of property contained in the amended outline of case document in his opening address at the resumed hearing, there was no formal admission on the part of the wife as to the value of the livestock.  More importantly, that value was never accepted as correct by the husband or by his counsel.  Nor, indeed, was it accepted as being correct by the wife in her evidence.  In my opinion, the value of the livestock set out in the affidavit and amended outline of case document amounts to no more than an informal admission, which can be and has been contradicted by other admissible evidence tendered by the wife.  In any event, there is no evidence that the value of the livestock contained in those documents was based on the wife’s personal knowledge.  Faced with a conflict between the wife’s evidence in the witness box and a clearly disputed informal “admission” as to the value of the livestock contained in her affidavit and amended outline of case document, it seems to me that the wife’s direct, admissible evidence must prevail.

   h)Even if the initial reference to the value of the livestock at $36,600.00 could fairly be described as an “admission against interest”, it is insufficient to prove the issue in the particular circumstances of the present case.  Thus, for example, Mr Puckey did not submit that he elected not to cross examine the wife regarding the value of the livestock because that issue had been rendered irrelevant by the wife’s informal admission to the effect that the value of the livestock is $36,600.00; Mr Puckey’s submission was that the wife should be held to her much earlier informal admission, to the effect that the value of the livestock is $80,400.00.  For reasons which I have already discussed, I have rejected Mr Puckey’s submission in that regard.  In similar manner, there was never any consensus to the effect that the value of the livestock should be fixed at $36,600.00.  In such circumstances, the issue must be determined on the basis of the evidence as it stands at the completion of the trial.

   [17] See Exhibit H3

   [18] See annexure GJC-1 of the affidavit of the wife sworn 26 July 2006

Farm Creditors

1. In her affidavit sworn 26 July 2006, the wife deposed to the existence of “farming creditors” totalling $50,800.00.  The same amount appeared as a liability in the wife’s outline of case filed 27 July 2006.  In the wife’s amended outline of case document filed 3 November 2006, the figure for “farming creditors” was $67,734.00. 

2. During the course of the wife’s examination in chief, she identified a list of the farm creditors, and said that the list is based on invoices in her possession.  After confirming that the figures in the schedule were correct as at 7 November 2006 (being the day upon which the wife gave her evidence), the summary, together with a bundle of invoices and other documents, were tendered – without objection from Mr Puckey.  The summary and attached documents comprise Exhibit W2.  According to the summary, the total of the farm creditors is $69,289.60.  

3. In cross examination, the wife explained that the difference between the figure of $67,600.00 appearing in her amended outline of case document and the figure of $69,289.60 contained in exhibit W2 reflects an arithmetical error on her part.  The wife also confirmed that approximately $20,000.00 of additional debt had been incurred since July 2006, and $40,000.00 of the total debt of approximately $69,000.00 had been accrued since the parties separated.

4. Mr Puckey suggested to the wife that the income levels on the farm “go up and down at different times of the year”.  The wife agreed.  The wife asserted, however, that she had taken the imbalance between expenditure and income at various times of the year into calculation in her summary.  The thrust of her evidence is that the farm owes similar amounts to creditors at any particular point during the year, although the precise amount owing might vary.  The wife confirmed that she receives milk cheques monthly, and pointed out that the summary includes an allowance for the October milk payment (to be received in November 2006).

1. The wife also gave evidence to the following effect during her cross examination:

   a)Not all of the figures appearing in the hand written summary comprising part of Exhibit W2 are supported by documents also forming part of the exhibit.  The wife omitted certain invoices that “haven’t been issued”.

   b)The creditor described as GRH (to whom the amount of $21,789.50 is owed) is the wife’s brother. 

   c)The wife receives milk cheques monthly.  Generally speaking, income from milk production during the months of August, September and October in each year is significantly lower than income from milk production in the other months of the year[19].

   d)The reason for the decrease in income from milk production during the winter months is because milk prices generally rise over the winter months, but production is down.  Dairy farmers receive a “winter incentive” – which involves a higher milk price to offset the reduced supply.

   e)The expenditure listed in the hand written summary relates to the earning of income on the farm.  As such, it can usually be offset against the farm’s net profit. 

   [19] See Exhibit H2

2. During the course of his closing address, Mr Puckey pointed out that a number of the items or figures appearing in the wife’s summary (comprising part of Exhibit W2) are not supported by attached documentary evidence.  I accept that submission, but note that the wife explained that not all invoices had yet been received.  It is fair to say, however, that the wife’s summary is difficult to follow, and some of the figures (for example, item 8 relating to “water use”) are difficult to understand, or do not appear to relate to attached invoices.

3. Mr Puckey also submitted that the Court should infer that the amount owing to the wife’s brother is not a present liability, and that it will not “ultimately be paid”.  The fact of the matter is, however, that the wife was not cross examined regarding the debt to her brother (other than to the extent of identifying it), and it was not put to her that the debt does not reflect a “real” liability.  I have no reason to reject the wife’s evidence to the effect that the amount of $21,789.50 is owed to her brother.

4. Mr Puckey also submitted that, because the farm income and expenditure are cyclical in nature, and because the recorded debts relate to the generation of income from milk production, the Court should somehow ignore the amount owning to creditors.  Mr Puckey suggested that the Court must “take into account the fact that the income that the wife will receive will pay those accounts in the ordinary course of business”.  I reject Mr Puckey’s submission in this regard.  I can see no reason why the farm creditors should not be included as a liability in the schedule of property and liabilities available for distribution between the parties – although perhaps not at the figure claimed by the wife.

5. There are well recognised exceptions to the rule that all items of property, and all liabilities, should be identified and taken into account in the property settlement exercise.

6. In Biltoft (1995) FLC 92-614, the Full Court said:

   A general practice has developed over the years that, in relation to applications pursuant to the provisions of s. 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities. In the case of encumbered assets, the value thereof is ascertained by deducting the amount of the secured liability from the gross value of the asset. See, Ascot Investments Pty Ltd v. Harper & Anor (1981) 148 CLR 337 where Gibbs J. (as he then was) pointed out at p 355  that the Court ''must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it'' . Where the assets are not encumbered and moneys are owed by the parties or one of them to unsecured creditors, the court ascertains the value of their property by deducting from the value of their assets the value of their total liabilities, including the unsecured liabilities. See Prince and Prince; General Credits Australia Limited (Intervenor); A-G for the State of Queensland (Intervening); A-G for the Commonwealth of Australia (Intervening) (1984) FLC 91-501, where Evatt CJ. at p 79,076  said:¾   

   ... the outcome of the wife's application will depend upon findings made by the Court as to the parties' assets and liabilities, their contributions and their respective financial resources, means and needs. It would be necessary for the Court to determine so far as is possible the value of the property held by each party. In accordance with the usual practice this would be done by deducting the value of outstanding mortgages, debts, and other liabilities (e.g. Albany and Albany (1980) FLC ¶ 90-905, p. 75,717 ). The Court may have to determine, as between the parties, the existence of a particular liability (Af Petersens and Af Petersens (1981) FLC ¶ 91-095).

   The assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases. While some liabilities are charges upon the property which can be accurately assessed at a certain date, others are at large, or have not been precisely determined, e.g. tax liabilities (Kelly and Kelly (No. 2) (1981) FLC ¶ 91-108 p. 76,801 ). In some cases the amount of the liability can only be estimated generally (Albany (supra) , p. 75,717). The Court can make an allowance for a particular liability if appropriate to do so. In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (e.g. a loan from a parent of the party not likely to be enforced; Af Petersens (supra) ; Quirk (1983) unreported). In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under sec. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party's potential entitlement under sec. 79 (Kimber and Kimber (1981) FLC ¶ 91-085 ; Kowaliw and Kowaliw (1981) FLC ¶ 91-092 ; Antmann and Antmann (1980) FLC ¶ 90-908 ; Af Petersens (supra) ). Complex issues can arise in regard to liabilities to third parties (see, e.g. Pockran and Crewes; Pockran (1983) FLC ¶ 91-311 ).  

   Of course, the Court cannot ignore the fact that there is or may be a liability; the effect is simply that it does not consider that the other spouse should be called upon to in effect 'contribute  to the liability by having that spouse's fair share in the parties' property reduced by virtue of its existence. The effect may be that the party who has incurred the liability will be left to meet it out of whatever funds remain to that party after satisfying the property order made under sec. 79 (Af Petersens (supra) )

   The Court, in that case, went on to dismiss the appeal of the wife against an order staying her proceedings for property pending the outcome of proceedings on foot in the Supreme Court because, inter alia, ''[i]t would not be until those proceedings had been completed that it would be known whether there was any property in the estate in respect of which orders could be made pursuant to sec. 79'' . The clear indication of the Full Court in that statement was that the property of the parties for the purposes of an order pursuant to s. 79 means net property.  

7. The Full Court continued (at p. 82,127):

   Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred…

   There is no requirement that the rights of an unsecured creditor or a claim by a third party must be considered and dealt with prior to the Court making an order under s. 79, nor is there a rule of priority as between a creditor claimant and a spouse. Those rights, however, cannot be ignored. They must be recognised, taken into account and balanced against the rights of the spouse…

8. In a similar context, the question of how to deal with liabilities which have been "unreasonably incurred", or the loss of assets by a party prior to the trial in circumstances which can be regarded as reckless or unreasonable, usually leads to consideration of cases such as Kowaliw (1981) FLC 91-092 and Townsend (1994) FLC 92-569.

9. In Kowaliw, Baker J said (at page 76,643-4):

   Marriage is for most couples an economic partnership.  Married couples live together and work together with the ultimate object of purchasing a home, paying it off, acquiring other assets with the overall object of attaining a higher standard of living.  The reported decisions in respect of applications for settlement of property under sec.79 of the Act are unanimous that both parties should share the economic fruits of a marriage, having regard to the provisions of sec. 79(4) and sec. 75(2), although not necessarily equally.

   Is not, however, the converse equally sustainable?  In other words, should not financial losses incurred by parties to a marriage or either of them, whether incurred jointly or severally, be shared by them in the same manner as the financial gains?

   As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:

   (a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or

   (b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

10. In Browne v Green (1999) FLC 92-873, the Full Court said:

    While care should probably be taken … not to elevate Baker J's statement (in Kowaliw) to "a principle", we are nonetheless satisfied that it is certainly is a well-accepted guideline within the jurisdiction which has received the endorsement of successive Full Courts.

11. I refer, as well, to the discussion of the Kowaliw principles in Omacini (2005) FLC 93-218 and Crampton (2006) FLC 93-269.

12. I am not satisfied that the wife has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of the property available for distribution between the parties.  Nor am I satisfied that she has acted recklessly, negligently or wantonly in any way, or with any property.  Whilst I recognise that the Court has a discretion which would permit it to ignore or to discount the value of an unsecured liability in certain circumstances, I am not satisfied that such circumstances adhere in the case now before me.  The wife’s debts to her creditors are neither vague nor uncertain – although they may require some analysis.  There is no evidence that the debts are unlikely to be enforced, or that they were unreasonably incurred.  Put shortly, neither justice nor equity demand, or even suggest, that the wife’s liability to her creditors should be wholly or partly disregarded.  I propose to take them into account.

13. I am aware, of course, that the husband also conducts a business.  For reasons that were not explained (but may be related to the submission made by Mr Puckey to the effect that business creditors should be ignored), I was not presented with any evidence regarding the husband's creditors.  In those circumstances, and given that the pool of property available for distribution between the parties was agreed (save for the two items dealt with in these Reasons), I have not brought the husband's creditors into account.

Quantum of “farm creditors”

1. Having determined that the farm creditors should not be ignored, the question arises as to the figure to be attributed to this item.  According to Exhibit W2, the total amount owing to creditors as at 7 November 2006 was $84,289.60.  From that figure, the wife deducted $15,000.00 – being an allowance for the October milk production (to be paid in November 2006).  Thus, the total net figure in respect of farm creditors was $69,289.60. 

2. The wife’s evidence was that the schedule comprising Exhibit W2 is a summary “based on invoices”.  As Mr Puckey pointed out during his closing address, however, a number of the items on the list are not supported by documents forming part of the exhibit.  Further, the figure relating to water use (being item 8 on the list) cannot be comfortably reconciled with the relevant invoice.  In all the circumstances, and doing the best that I can with the information available to me, I conclude that an appropriate allowance for farm creditors is as follows:

Five Star Feeds Pty Ltd	$35,302.29
GR & JR H Pty Ltd	$21,789.50
Clavin Rogers & Associates Pty Ltd	$1,999.48
JR & KE McEwen	$1,031.80
KJ & R Hooper	$8,263.64
Ashleigh Downs Estates	$330.00
Northvic Fertilisers	$3,234.09
Northern Herd	$179.63
ABS Australia	$416.49
Premium Dairies Pty Ltd	$275.55
Gannawarra Shire Council	$1,516.10
TOTAL	$74,338.57

1. It will be seen from the above table that I have ignored the figures in relation to which no supporting evidence was produced.  I have also ignored the figure relating to water use, because the figure in the hand written list does not comfortably reconcile with the relevant invoices. 

2. When an allowance is made for the October milk production (to be paid in November 2006) – amounting to $15,000.00 – it is apparent that the total figure for farm creditors is $59,338.57 (being $74,338.57 minus $15,000.00).

Contributions of the parties

1. I now turn to consider the second “step” of the property settlement exercise – namely, the identification and assessment of the parties’ contributions in all their various guises.

2. I have already provided a brief history of the parties’ relationship elsewhere in these Reasons.  I have also commented upon their credibility.

3. The husband’s case is that the parties’ contributions (in all their various guises) should be treated as approximately equal from the date of commencement of cohabitation (in or about 1978) to the date of trial.  The wife’s case is that an appropriate division on the basis of contributions alone – to reflect the period from the commencement of cohabitation to the date of trial – is 60% to the wife and 40% to the husband.  According to Mr Devries, that percentage split takes into account the wife’s post-separation contributions, and what were described as the “Kennon factors”.

4. An appropriate staring point for consideration of the parties’ contributions is Mr Devries’ concession – made during the course of the husband’s cross examination – to the effect that, save for the Kennon factors, the parties’ contributions (in all their various guises) from the date of commencement of cohabitation to the date of separation were approximately equal.  Mr Devries argued, however, that the wife’s post-separation contributions should be given more weight than those of the husband.  The first step in the consideration of this subject is, therefore, to consider whether the Kennon factors might cause the Court to conclude that the parties’ contributions from the date of commencement of cohabitation to the date of separation were something other than approximately equal. 

Kennon factors

1. In Kennon [1997] FLC 92-757, the Full Court said (at page 84, 294):

   Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within section 79. We prefer this approach to the concept of ‘negative contributions’ which is sometimes referred to in this discussion.

   In the above formulation, we have referred only to domestic violence…but its application is not limited to that.

2. The Full Court continued (at page 84, 294):

   It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect…

3. In S & S (2005) FamCA 1304, the Full Court said[20]:

   The term “course of conduct” is a broad one.  We do not think that conduct must necessarily be frequent to constitute a course of conduct, although a degree of repetition is obviously required.

   [20] At paragraph 65

4. In G & G (2006) FamCA 877, Warnick J accepted that “…before domestic violence can affect a contribution assessment, two matters of fact must be established…” Those “matters of fact” are as follows:

   a)A relevant course of conduct towards the other party to the marriage.

   b)The relevant course of conduct must be demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, and to have made his or her contributions significantly more arduous.  Such conduct must also have had a discernable impact on the contributions of the other party.

5. His Honour held, in effect, that general statements to the effect that domestic violence has had or may have had a “significant adverse impact” or a “discernable impact” upon the contributions of the party subjected to it are inadequate to explain or justify practical weight been given to the factor.  In other words, evidence of the relevant course of conduct and its impact upon the other party’s contributions is crucial. 

6. His Honour also held that the correct approach to evidence of this nature is to make appropriate findings regarding –

   a)the relevant course of conduct; and

   b)its impact upon the party subjected to it (“the victim”),

   in the context of determining whether greater weight should be given to particular types of contribution made by the victim than would otherwise be the case. 

Course of conduct, and the impact of such conduct – evidence

1. The principal evidence of the wife in relation to this subject is contained in her trial affidavit (sworn 26 July 2006).  After dealing with the subject of her contributions generally (with particular emphasis upon her contributions to the welfare of her family)[21], the wife deposes as follows[22]:

   I was diagnosed as suffering from an obsessive compulsive disorder from the birth of our first child (1981).  I was placed in a Melbourne Psychiatric clinic for two weeks.   I have taken medication for my condition over many years although at the present time I am not taking any psychiatric medication.  The husband was quite supportive in the early years of my condition but in the later half of our relationship things deteriorated and he taunted me about my problems in a cold manner.  The husband’s taunting of me has impacted on my levels of confidence which were at an all time low when we separated.

   [21] See paragraphs 8 to 18 of the wife’s trial affidavit

   [22] See paragraph 19

2. In paragraph 20 of her affidavit, the wife deposes as follows:

   There were at least three occasions during the period when we remained married that the husband was living in the caravan where he sexually assaulted me trying to force me or by forcing me to have sex with him against my wishes, and by physically restraining me…

1. The wife thereafter describes three serious sexual assaults that she alleges were perpetrated upon her by the husband.  The third is clearly the most serious and can fairly be described as a rape.  All three assaults involved the use of force on the part of the husband.

2. In paragraph 21 of her trial affidavit, the wife describes three serious (non-sexual) assaults upon her by the husband.  The first was in or about 1981, and involved the husband punching the wife in the face, thereby breaking her glasses and causing her to fall to the floor.  The second occurred after the husband had moved out of the house and commenced living in the caravan.  The husband again hit the wife in the face.  The third assault also occurred after the husband had commenced living in the caravan.  Following an argument involving the children (or some of them), the husband once again punched the wife in the face, as a result of which she later fell to the floor.

3. Paragraph 21 of the wife’s affidavit also contains reference to the husband frequently (verbally) abusing the wife, arguing with her and belittling her.  On two occasions, following arguments in relation to financial matters, the husband threatened “to put a bullet in (the wife’s) head”.

4. In paragraph 22 of her affidavit, the wife asserts that the husband “…was cruel to our milking cows over the years”.  She describes the husband’s behaviour in that regard.

5. In paragraph 23 of her affidavit, the wife deposes as follows:

   The husband’s physical and sexual assaults of me and his cruelty to our animals has had an impact on my emotional health and I say that I remain quite anxious about many things which I say impact on my ability to obtain outside employment.

6. In the subsequent paragraphs of her affidavit, the wife describes the parties’ property, and deals further with her financial and other contributions to the farm and to the welfare of the family.  She also deals with her financial contributions made subsequent to the date of separation.  The wife also deals (very briefly) with the section 75(2) factors. 

7. The parties’ daughters, M and H, swore affidavits in support of the wife’s case.  Neither daughter was required for cross examination.  Mr Puckey said that he had received instructions not to cross examine M and H because, in effect, the husband did not wish to cause his relationship with his daughters to deteriorate further.  Be that as it may (and I made no finding as to the husband’s real motivation for instructing Mr Puckey not to cross examine M and H), the two affidavits were not tested in any way.  Although the husband denied much of the behaviour attributed to him by M and H, I have no reason to reject their evidence.

8. In paragraph 2 of her affidavit, M deposes as follows:

   I make this affidavit at the request of my mother’s solicitor and I am aware that doing so will further damage my non-existent relationship with my father with whom I have not really had a proper relationship since I was in my mid teens.

9. In summary, the remainder of M’s evidence is as follows:

   a)She has “…observed a number of incidents over the years where (the husband) has assaulted (the wife) and farm animals”.

   b)She was present when the husband assaulted the wife in front of the children by hitting her in the face and causing her to fall to the floor and strike her head on the oven.  This is clearly a reference to the incident described by the wife in her affidavit[23].

   c)She observed the husband slap H on one occasion, and assault her brother, S on another occasion.

   d)When she was “very young”, she heard arguments between the husband and the wife, and she and her brother would comfort the wife after the husband had left. 

   e)She observed the husband acting in an violent and/or cruel manner towards cows, calves and dogs.  This type of behaviour occurred on many occasions.

   [23] See paragraph 21(iii) of the wife’s trial affidavit

10. In paragraph 15 of her affidavit, M deposes as follows:

    My father… was frequently abusive to Mum and I observed her being extremely anxious and upset on many occasions.  My mother would frequently become very upset following various incidents with my father and that would set off a period where she would have to clean the house for hours.

11. In summary, H’s evidence is as follows:

    a)She corroborates material particulars of the wife’s description of the most serious of the three sexual assaults[24].  Amongst other things, she heard the husband enter the wife’s bedroom late at night, and later heard the wife calling out “Stop – Get off me R – Stop”.  She later heard the husband leaving the house and returning to the caravan.  Afterwards, she spoke with the wife and “… could tell by her voice that she was scared and upset”. 

    b)She describes the assault (deposed to by both the wife and M) which occurred in front of the children, and which involved the husband striking the wife across the face and causing her to fall and hit her head on the door of the oven.

    c)She witnessed an assault upon S by the husband on Christmas day 2004 (being the incident described by M in her affidavit). 

    d)She describes the husband being cruel and violent towards cows and calves. 

    [24] See paragraph 20(iii) of the wife’s trial affidavit

12. The final paragraphs of H’s affidavit are as follows:

    8.     I have observed the effect that my father’s violence towards animals has had on my mother.  She was unable to do anything to protect the cows and calves and she would walk away crying and upset.

    9.     I have seen my mother in a “cleaning frenzy” sometimes staying up until 4.00 a.m. cleaning everything following an argument with or abuse from my father.  I have observed a remarkable improvement in Mum’s ability to cope with her illness since my father has left.

13. The husband responded to the allegations contained in the wife’s affidavit, and in the affidavits sworn by M and H, in his affidavit sworn 27 July 2006.  In summary, the husband’s evidence is as follows:

    a)He denies that he has been “cruel to (the wife) and taunted her about her obsessive compulsive disorder”.

    b)He denies the three sexual assaults described by the wife and explains that the wife “…had significant problems with an intimate relationship”.

    c)He says that he respected the wife’s various problems and her inability to be intimate.

    d)He admits that he slapped the wife on two occasions – the first being in or about 1981 and the second being the occasion when the children were present.  In relation to the first incident, the husband alleges that the wife’s behaviour was “erratic” and that she had yet to be diagnosed with obsessive compulsive disorder.  In relation to the second incident, the husband asserts that the wife “… had engineered an argument in front of three of the children…”.  The husband also asserts that the wife fell on that occasion “as a result of being startled”, and not as a result of the strength of his blow.

    e)He has never intentionally been cruel to an animal, although he has sometimes struck an animal as part of working with them.

    f)He admits having slapped H on one occasion, and having placed his hands around S’s throat and on his shoulders and shaking him.  The latter event occurred on Christmas Day, 2004.

    g)The other allegations in the wife’s affidavit, and those of M and H, are denied.

14. In paragraph 29 of his affidavit sworn 27 July 2006, the husband deposes as follows:

    ... I never played with the emotions of my children.  I was not frequently abusive to their mother.  I tried my best to keep our marriage together and our children in a family unit.  However, ultimately it just became too difficult.

15. The wife was cross examined by Mr Puckey regarding the husband’s conduct.  She did not resile from the evidence contained in her affidavit.  She denied that she had exaggerated any incidents, and denied the husband’s assertion that he had apologised after the assaults to which he had admitted in his affidavit.

16. During the course of his cross examination by Mr Devries, the husband denied the allegations made by M and H regarding his inappropriate treatment of the livestock.  He was not cross examined regarding the wife’s allegations of serious sexual and other assaults.

Conclusion regarding the husband’s course of conduct and its impact

1. I have set out the evidence regarding the husband’s alleged conduct in some detail in order to focus upon those matters of fact that must be established before domestic violence can touch upon an assessment of the parties’ respective contributions.  Without the necessary evidentiary foundation, no relevant findings can be made, and, as a result, no corresponding conclusion can be reached regarding the weight to be attributed to the parties’ respective contributions. 

2. In my opinion, the husband’s behaviour towards the livestock or other farm animals does not fall comfortably within the type of conduct envisaged in Kennon.  It is clear that the course of conduct referred to in Kennon is not limited to domestic violence, and is broad enough to incorporate other forms of behaviour, but it seems clear that the conduct must be “by one party towards the other”.  The more indirect or remote that conduct becomes, the greater the importance of demonstrating that it had “a significant adverse impact” upon the other party’s contributions or, alternatively, that those contributions were made “significantly more arduous that they ought to be have been”.  I have no doubt that the husband’s conduct towards the farm livestock and other animals (as described in M’s affidavit and H’s affidavit) upset the wife considerably, but there is simply no evidence that such conduct had a discernable impact upon any of the relevant forms of contribution made by the wife.  Put another way, there is no evidence that the husband’s conduct in this regard caused any of the wife’s contributions (in the relevant sense) to be significantly more arduous than they ought to have been.

3. During the course of his cross examination of the husband, Mr Devries suggested that the husband’s treatment of the livestock may have had financial consequences.  On the evidence before me, I am not satisfied that such consequences (if there were any) were significant.  In any event, the actual or notional financial loss to the parties occasioned by the husband’s cruelty to, or inappropriate treatment of, the livestock was not a matter raised by the wife or her daughters in any of their material. 

4. There can be no doubt that there is evidence before the Court of violent conduct by the husband towards the wife.  Such a finding is open to the Court on the basis on the husband’s own admissions.  When regard is had to the findings that I have made in relation to the parties’ credibility, and to the fact that the evidence of M and H was unchallenged, I am also prepared to find that the husband’s behaviour in this regard amounted to “a course of violent conduct” by the husband towards the wife.

5. It is important that I record the fact that the Court treats the wife’s allegations extremely seriously, and does not minimise them in any way.  There can be no doubt that the husband’s behaviour – as described in the wife’s affidavit and the affidavits of her daughters – would have had a very significant adverse impact upon the wife.  Clearly, such conduct on the part of the husband would have been emotionally and psychologically devastating for the wife.  Further, the husband’s conduct would have seriously and adversely affected the wife’s confidence and self esteem. 

6. I am bound to make findings in accordance with the evidence before me.  I conclude from that evidence that the wife’s ability to care for, support and nurture the children, to keep house for the family, to work efficiently and with focus in an attempt to improve the economic circumstances of the parties and to provide a happy, secure and supportive environment for the family as a whole was discernibly (and adversely) affected by the husband’s conduct. 

7. It seems to me that it is impossible not to conclude that the wife’s contributions to the welfare of the family, and in the role of home maker and parent, were made significantly more arduous as a result of the husband’s conduct than they ought to have been.  Both M and H describe the wife obsessively cleaning the house after incidents involving the husband.  Further, they describe the wife being upset and in need of comfort as a result of the husband’s conduct.  The wife herself described the husband's behaviour as impacting on her levels of confidence.  In my opinion, the wife was entitled to expect that she would be free to perform her functions as home maker and parent without the overlay of emotional stress and anxiety[25] inevitably associated with the husband's behaviour on the occasions described in the evidence.  Generally speaking, the wife should have felt secure in the knowledge that the husband, the father of the parties’ children, would support her in her home making and parenting roles, and not knowingly add to the obvious burdens associated with the running of a household containing four children.  Whilst I accept that the husband assisted the wife from time to time, and that the conduct to which I have referred above occurred relatively infrequently, that conduct must necessarily have caused the wife’s contributions to the welfare of the family – in the broadest sense – to be significantly more arduous than they ought to have been.  Put a different way, the wife's contributions to the welfare of the family were clearly more arduous than they would have been if the husband had not behaved in the manner that he did.

   [25] see paragraph 23 of the wife's trial affidavit

8. An assessment or analysis of the type undertaken by the Court under the general heading of the Kennon factors cannot and should not be attempted with some form of mathematical precision.  The assessment or analysis in this regard is part of a broad discretionary exercise, and the evidence to which I have referred leads inexorably to a tilting of the scales in the wife’s favour – but only, as I have indicated, in relation to one aspect of the wife’s contributions (being her contributions to the welfare of the family in the broadest sense).

Findings regarding contributions

1. Leaving aside the husband’s conduct (as described above), there was no suggestion that the parties’ contributions (in all their various guises) from the date of commencement of cohabitation to the date of separation should be regarded as anything other than approximately equal.  The parties lived together for some 25 years, and during that period both worked extremely hard.  The husband’s energies were primarily directed towards the running of the electrical contracting business, and towards the farming enterprise.  The wife also assisted in the farming enterprise, but her principal focus was the home and the children.

2. Having regard to the manner in which the case was conducted before me, there is no need to analyse the financial and non financial contributions made by the parties to the acquisition, conservation and improvement of their property.  Nor is there a need to analyse the parties’ respective contributions to the welfare of the family beyond the analysis already performed in the context of considering the effect of the husband’s conduct.  When I take into account the finding that I have made in relation to the husband’s conduct and its impact upon the wife’s contributions to the welfare of the family, however, I am not persuaded that the parties’ various contributions in all their guises should be given the same weight.

3. Given that the concession of equality (relating to the period from the commencement of cohabitation to the date of separation) was necessarily founded on an assumption that the wife’s contributions to the welfare of the family (which contributions the husband accepted were significantly greater than his) were no more arduous than they ought to have been, some adjustment must be made to take account of the husband’s behaviour and its impact upon those contributions.

4. In my opinion, and in all the circumstances (including the length of the period of cohabitation), I find that, up to the point of separation, it would be fair to conclude that the wife’s overall contributions (in all their various guises) were of greater significance or weight than those of the husband by a factor of approximately 6%.  In other words, the difference between the weight to be given to the parties’ respective contributions, in all their various guises, up to the point of separation, is approximately 6% – attributable entirely to the additional weight to be attributed to the wife’s contributions to the welfare of the family as a result of the findings (regarding the husband’s conduct and its impact) made above.  I therefore conclude that 53% of the overall property pool should be awarded to the wife on the basis of her contributions from the commencement of cohabitation up to the point of separation.  Conversely, 47% should be awarded to the husband on the same basis. 

5. The period from the date of separation to the date of trial was approximately 20 months.  It is very brief when compared with the period of approximately 25 years from the date of cohabitation to the date of separation. 

6. After separation:

   a)The wife took over the running of the farm.

   b)The husband assisted the wife in the running of the farm by being responsible for one of the two daily milkings for a period of approximately 8 months.  He also assisted the wife by performing some tasks on the farm.

   c)The husband continued to conduct the electrical contracting business, without assistance from the wife. 

   d)The wife retained the net income from the farm and the husband retained the net income from the electrical contracting business.

   e)The wife made payments (from the farm income) towards the mortgage encumbering the farm property, thereby reducing the mortgage by approximately $27,500.00.

   f)The wife and the children (or some of them) continued to reside on the farm, whilst the husband was obliged to obtain rental accommodation elsewhere.

   g)The wife also paid (from the farm income) an amount of approximately $7,200.00 in respect of lease or hire purchase payments relating to a motor vehicle retained by the husband and used as his work vehicle.

7. When regard is had to the relatively short period of time that has passed since the date of separation, and doing the best that I can with the evidence available to me, I conclude that an appropriate division of the parties’ property available for distribution between them – on the basis of contribution alone – is 57% to the wife and the balance to the husband.  In other words, the finding in respect of the wife’s overall contributions should move from the figure of 53% as at the date of separation to 57% as at the date of trial.

8. In Gleeson (2004) FamCA 1179, the Full Court said (in relation to an exercise of judicial discretion such as that which I have performed in the previous paragraph):

   73.…(Words) will often (perhaps always) fall frustratingly short of an incontestable explanation for any particular exercise of discretion – or, for that matter, for a finding by an appellate court that a particular exercise was wrong.  All the relevant factors can be described, with modifiers in abundance, but still the analysis will beg the question, “Yes, but why that figure and not another?” or “Why was that the range rather than some other parameters?”

   74.The deficiency is unavoidable.  When there are a number of “right” results available, the explanation for the choice of one over others can never be incontestable.  Nor can the reasons for saying that a result is outside a range be beyond challenge.  The very nature of a discretionary exercise that ascribes mathematical consequences to a batch of actions and events amenable only to descriptive evaluation, means that it is impossible to place beyond argument the explanation for all the steps to the ultimate selection of result.

   …

   81.…(In) respect of virtually every exercise of discretion, by definition, it will not be possible to deliver a judgment which excludes reasoned argument that another result was available.

1. For what it is worth, I concur with the Full Court’s view as expressed in the passage from Gleeson quoted above.  The “balancing exercise” that the court must perform is rarely an easy or non-contentious one.

Section 75(2) factors

1. So far, in considering the question of property settlement, I have dealt with the identification of the parties’ property and the question of contribution.  The Court has power to make an adjustment to a party’s property settlement entitlement on the basis, amongst other things, of both parties’ respective means and needs.  The Family Court has been critical of shorthand terms being used to describe this step in the property settlement exercise, preferring to refer to it simply as “the section 75(2) factors”[26] In essence, s.75(2) is concerned with the process of arriving at a just and equitable result.[27]

   [26] See Clauson (1995) FLC 92-595.

   [27] See, in that regard, Waters & Jurek (1995) FLC 92-635.

2. I have already recorded the age of each of the parties.

3. The husband is in good health.  The wife suffers from obsessive compulsive disorder.  She took medication for her condition for many years, but is not presently on any medication.  According to H, there has been “a remarkable improvement in (the wife’s) ability to cope with her illness since (the husband) has left”.

4. I have dealt with the property of the parties elsewhere in these Reasons.  It was agreed that the parties’ respective superannuation entitlements should be included in the overall “pool” of property available for distribution between the parties.  In other words, neither party suggested that superannuation should be included in a separate list[28], to be treated differently from the remaining items of property.  Further, there was no suggestion that the parties’ contributions to their superannuation interests should be treated or assessed any differently to their contributions to other items of property.  In other words, a “global” approach was adopted.

   [28] See Coghlan (2005) FLC 93-220 at paragraph 63

5. Clearly, the court has a discretion as to how superannuation interests should be treated in a particular case[29].  Given the manner in which the case was presented (by both parties), and the matters described in the previous paragraph, there is no reason why the court cannot give proper recognition to the nature of the parties’ superannuation interests and make orders which are just and equitable.

   [29] See Coghlan, at paragraph 65

6. I recognise, therefore, that the “pool” of property available for distribution between the parties includes the husband’s superannuation entitlements valued at $71,346.00 and the wife’s superannuation entitlements valued at $19,379.00.  Given that no splitting order was sought by either party, and that the husband does not oppose orders which will have the effect the wife retaining the farm and dairy business generally, it is clear that the husband will be retaining his superannuation as part of his overall property settlement entitlement.  To that extent, the husband will receive a substantial proportion of his entitlement by way of retention of superannuation benefits which are not presently available to him.

7. In relation to the parties’ incomes, Mr Puckey submitted that, because she lives on the farm, the wife’s living expenses are lower than they might otherwise be.  He referred to her evidence to the effect that her income is approximately $540.00 per week, that she pays approximately $40.00 per week in respect of income tax and that her personal expenditure amounts to approximately $50.00 per week.  The wife conceded that expenditure in relation to items such as electricity, fuel and oil costs, council rates, water rates and telephone can be channelled (as it were) through the farming business and claimed – in whole or in part – as an expense to be deducted from the farm’s gross income.  It was Mr Puckey’s submission that the wife has a greater disposable income than the husband. 

8. In response, Mr Devries referred to the husband’s failure to make full and frank disclosure of his financial position (including, for example, his failure to disclose the existence of his Ford Fairmont motor vehicle in either his affidavit or his financial statement).  Mr Devries also made reference to the husband’s evidence to the effect that his income is approximately $100.00 per week greater than that disclosed in his financial statement, and to his evidence in relation to the “contra” arrangements.

9. On the other hand, Mr Devries submitted that the wife’s income will be affected adversely as a result of the cessation of dairy industry deregulation payments.  The parties were to receive quarterly instalments for 7 years from 2000.  The husband conceded that the effect of the termination of these payments is that the farm income will soon reduce by approximately $100.00 per week.

10. The husband’s evidence at trial was that he is earning approximately $700.00 per week.  Given the findings that I have made in relation to his failure to make full and frank disclosure, I conclude that the husband is likely to be earning more than this amount, but not significantly more.  The fact of the matter is that both parties worked hard for the betterment of the family during the period of cohabitation.  Neither the farm nor the electrical contracting business generated a substantial income and, in the husband’s words, the parties had “a modest life-style”.  I accept that the wife is able to (legitimately) claim certain payments that might otherwise be regarded as living expenses as expenses of the farm enterprise.  Given that the husband is self employed, there is also scope for him to make similar (although less substantial) claims.  Overall, I conclude that the husband’s income is appreciably greater than that of the wife.

11. I am satisfied that both parties have the physical and mental capacity to continue to conduct the businesses in which they are currently involved – being the farm in the case of the wife and the electrical contracting business in the case of the husband.  I find that the husband is capable and resourceful, and that he has the ability and opportunity to expand his business and generate more income if he is minded to do so.

12. Given the wife’s psychological difficulties, and the fact that she has not worked off the farm for many years, I find that it will be extremely difficult for the wife to obtain or maintain paid employment if she can no longer retain the farm.  I note, in that regard, that the wife was not cross examined in relation to this subject.

13. Neither party has the care or control of a child of the marriage who has not obtained the age of 18 years.  H lives with the wife and S and M stay with her during holiday periods.  M also stays with the wife on “most weekends”.  H is in paid employment and S and M receive a youth allowance.  J is financially independent. 

14. I accept that the wife provides financial assistance to H, S and M, but the law does not impose upon her a duty to maintain them.  Clearly, she feels a moral responsibility to support them.  The husband does not assist them financially.

15. I have already referred to the parties’ superannuation entitlements. 

16. Both parties are entitled to a reasonable standard of living.  In that context, the wife seeks to retain the farm and the husband does not oppose orders which will enable that to occur.  For his part, the husband seeks sufficient moneys by way of property settlement to re-establish himself.

17. The duration of the marriage (itself) has not affected the husband’s earning capacity.  The wife describes herself as having been employed as a nurse at the commencement of cohabitation.  As I understand the husband’s evidence, the wife was a double certificate nurse, but I find that she can no longer work in that field and, as recorded above, her only relevant earning capacity is in the context of the dairy farming enterprise.

18. Both parties recognise the significance of the farm in the wife’s life, although the husband argued (correctly) that if the farm must be sold in order to enable a payment to be made to the husband which does justice and equity to both parties, then that is what must occur.  Still, and as I commented during closing addresses, even if the wife could be regarded as having a modest earning capacity off the farm, she would not be able to earn significantly more than the sort of income that she can derive from the farm, and she would certainly not receive the tax benefits that adhere whilst she conducts the dairy farming enterprise.

Conclusion in relation to s.75(2) factors

1. Having regard to all the evidence before me, I am persuaded that it is appropriate to make an adjustment on the basis of the s.75(2) factors.  I am so persuaded because the purpose of the s.75(2) adjustment is to assist the Court in the process of arriving at a just and equitable result.  To refuse to make an adjustment in the present proceedings would be to run the risk of making orders which are neither just nor equitable.

2. In my opinion, the most significant of the s.75(2) factors is the fact that the husband has a greater earning capacity than the wife. Further, the fact that – given the husband’s estrangement from the children (or most of them) – the wife is likely to have to continue to support them (emotionally and, to some extent, financially) for some time to come seems to me to be relevant under s.75(2)(o) of the Family Law Act.  On the other hand, I am cognisant of the fact that the husband will receive a substantial proportion of his property settlement entitlement by way of retention of superannuation benefits which are not presently available to him.

3. I am very conscious of concepts such as those that were described by Nygh J in early cases as “palm tree justice” or “a soup kitchen approach” (in relation to subjects such as the s.75(2) adjustment).  I also recognise that the balancing exercise required by s.75(2) is an imprecise process, and that the comments from the Full Court’s decision in Gleeson, to which I have referred above, also apply to it. 

4. When I have regard to the above matters, together with all the other matters discussed under the general heading of the s.75(2) factors, I conclude that an appropriate adjustment of the parties’ entitlements on the basis of contribution alone is to increase the wife’s entitlement by 3%.

5. It follows that the overall distribution of the property between the parties should be on the basis of 60% to the wife and 40% to the husband.

Just and Equitable?

1. Section 75(2) is concerned with the process of arriving at a just and equitable result.  It follows that there may be circumstances in which the justice and equity of the case, and the specific provisions of section 75(2), support an adjustment in a party’s favour for matters which cannot comfortably be described as being of financial or economic significance.[30]

   [30] see McMahon (1995) FLC 92-606 at 82,043

2. Under section 79(2), the court is required to be satisfied that the order to be made is just and equitable – and not simply that the underlying percentage division of the net value of the parties’ assets is appropriate.  In other words, in the consideration of whether the overall result of property settlement proceedings is just and equitable, it is the justice and equity of the actual orders, and not of the percentage distribution, which must be considered[31].

   [31] see Russell (1999) FLC 92-877

3. Although I am of the view that the testing of any proposed orders by reference to s.79(2) is not a fourth substantive step (properly so called) in the property settlement exercise, and although I have considered the justice and equity of the overall “split” under the general heading of Conclusion as to s.75(2) factors, I propose to (metaphorically) step back and consider whether the outcome achieved by my consideration of the parties’ contributions and the s.75(2) factors has brought about a just and equitable result.

4. One of the more difficult aspects of the present case is the relatively modest size of the asset pool.  The Full Court has cautioned against assessing the s.75(2) factors in percentage terms, without considering the real impact of any proposed adjustment.  In other words, the real impact in money terms is “the critical issue”[32].  In the present case, the s.75(2) adjustment equates to approximately $11,715.00 (being 3% of $390,544.03).  I am satisfied that the adjustment is proper.  Indeed, I am satisfied that the adjustment is proper even when regard is had to the differential between the wife’s overall entitlement and the husband’s overall entitlement, which differential equates to 20% of the asset pool (or approximately $78,110.00).

   [32] See Clauson (1995) FLC 92-596

5. I am very conscious that justice and equity must be done to both parties, and I am satisfied that the split that I have proposed achieves that result.

Overall Conclusion

1. I have already recorded that the total net value of the property presently available for distribution between the parties $390,544.03.  60% of $390,544.03 is $234,326.42. 

2. It is apparent from the schedule contained in paragraph 52 above that the items to be retained by the wife comprise the farm property, the farm livestock and plant, the wife’s car, the Murray Goulburn shares (with their associated debt), the farm overdraft, the farm creditors and the wife’s superannuation entitlements.  It follows that the net value of the property to be retained by the wife is $289,208.03.

3. If the wife’s overall entitlement is to amount to $234,326.42, then she must pay to the husband the sum of $54,881.61 – which I shall round down to $54,880.00.

4. I shall now hear counsel as to the precise orders necessary to give effect to these Reasons.

I certify that the preceding one hundred and eighty-seven (187) paragraphs are a true copy of the reasons for judgment of Walters FM

Associate:  Suzette De La Motte

Date:  13 April 2007