Casper and Casper

FAMILY COURT OF AUSTRALIA

CASPER & CASPER

[2009] FamCA 989

FAMILY LAW – PROPERTY – farming enterprise – operated out of a family trust – significant contribution by the husband of assets held by him prior to the marriage – husband and wife each allege waste of moneys – husband seeking to retain farming property

Family Law Act 1975 (Cth)

APPLICANT:

Ms Casper

RESPONDENT:

Mr Casper

FILE NUMBER:

SYC

4466

2007

DATE DELIVERED:

15 October 2009

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Justice Fowler

HEARING DATE:

14-15 September 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Sansom

COUNSEL FOR THE RESPONDENT:

Mr Lloyd

Orders

The husband pay to the wife the sum of $1,719,339.35 in the following manner:
(a) As to the sum of $1,395,000 within 30 days of the date of these orders;
(b)As to the sum of $324,339.35 on or before the expiration of the anniversary of the date of the making of these orders; and
(c)Any amount due hereunder shall, as from 30 days from the date of these orders, bear interest at the rate of 5% per annum from that date to the date of repayment of the said sum in full. Interest is to be paid monthly in arrears on so much of the principal sum as is outstanding from time to time. In the event that interest remains unpaid for more than three months then the whole of the balance outstanding hereunder shall immediately upon notice in writing given by the wife to the husband become due and payable.
Simultaneously with the payment of the sum referred to in Order 1(a) the wife is to do all such acts and things as may necessary to transfer to the husband all her right, title and interest in and to the following:
(a)The property known as B Farm in the State of New South Wales, being a property of about 1,201.62 hectares being the property contained in Lot … in DP …; Lots … in DP …; Lots … in DP … and Lot … in DP …;
(b)The property known as A Farm in the State of New South Wales, being a property of about 2.617 hectares contained in Lot … DP …;
(c)The shares jointly owned by the parties, namely the AWB shares, Westfarmers shares, Telstra shares and News Corp shares; and
(d)Any equity the wife has in the produce stores.
The husband, in order to provide security for the payment of his obligations for payment to the wife of the sum in Order 1 above to be paid, or so much thereof as is outstanding from time to time, will charge in favour of the wife all his right, title and interest in and to A Farm and B Farm, provided however that such charge shall rank second in priority to existing charges on the said properties and any further advances made for the purpose of expenses incurred in the ordinary course of the business conducted by the husband on B Farm, including but not limited to Seasonal advances for the purpose of his primary production on B Farm.
In the event of default in payment pursuant to Order 1 hereof, and such default continuing for more than three calendar months, the husband shall do all such things and execute all such documents as may be necessary to procure the sale of A Farm and B Farm in that order for the best price reasonably obtainable therefore and shall apply the proceeds of sale in the manner and priority following:
(a)In payment of agents commission and selling costs including the legal costs and disbursements of and incidental to the sale;
(b)In payment of the amount charged on the said property including the amount due to the wife hereunder; and
(c) In payment of the balance to the husband.
Order 2(i) made by consent and set out under Order 8 of the Orders of

5 September 2007 permitting the wife to obtain $3,000 per month from an account in the name of the B Farm Trust, is discharged up and to the date to which it stands paid.
The wife forthwith sign all documents and do all things necessary to transfer to the husband all of her right, title and interest in, any loan account in, the B Farm Trust and resign from all positions she holds in the Trust.
Upon compliance with Order 6 above the husband shall indemnify the wife and keep the wife indemnified in respect of any liabilities of and in relation to any action, claim or demand of the Trust, whenever they were incurred and including any taxation liability.
Unless specified in these orders, each party is otherwise entitled to retain absolutely to the exclusion of the other all property of whatsoever nature or kind owned by that party and held in the name or possession of that party as at the date of these orders.
If either party refuses or neglects to sign within fourteen (14) days of a written request to do so any documents necessary to effect the terms of these Orders, the Registrar of the Sydney Registry of the Family Court of Australia is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 to execute such documents on behalf of such party.
Any application for costs be filed an served within 28 days of the Orders herein made, and subject to the following:
(a)any costs application is to be accompanied by affidavits setting out the evidence in chief on which the applicant wishes to rely together with any written submission in support of that application;
(b)
any respondent to a costs application must file within a further

14 days a response, together with a written submission in support of that response, and any affidavit material, setting out the evidence in chief upon which they wish to rely; and
(c)the applicant will have a further 7 days in which to file any submission in reply.

IT IS NOTED that publication of this judgment under the pseudonym Casper and Casper is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4466 of 2007

MS CASPER

Applicant

And

MR CASPER

Respondent

REASONS FOR JUDGMENT

Introduction

The proceedings before the Court are proceedings between the parties to a marriage in which they seek orders altering their interests in property.
The most significant property is a farm in New South Wales owned by them jointly and operated through a family trust.
The farm was transferred to the parties in an arrangement made with the husband’s parents who owned it as part of a larger enterprise with the husband and others in a unit trust. The units of the husband in that trust were redeemed by transfer of the property to him.
The farming enterprise operates significantly as a produce growing enterprise but engages in the cultivation of other crops as well.
The returns on the enterprise are significant in good years but the costs and risks associated with it are also significant and are weather and market dependent.
Notwithstanding an earlier suggestion to the contrary, there is, however, no issue between the parties in relation to the valuation of the realty, nor the valuation of the trust. There are however debts owed by the trust to the husband and by the parties to the trust.
The husband has conceded that the trust is the parties’ alter ego and, accordingly, a consideration of those debts is a little academic, although perhaps giving some emphasis to the extent of the husband’s contribution to the current wealth, but little more.
The first real issue between these parties is found in the desire of each of them to have taken into account what each of them considers to be waste. They ask that assets lost as a result of the asserted devastavit of the other be notionally added back to the pool of assets and allocated to the waster as a distribution.
The Court indicated to the parties in the course of the proceedings that it did not intend to make notional additions to a balance sheet of non existent assets except in relation to legal fees which were paid. This it said it would not do, notwithstanding the fashion that practice has amongst some, but that the issues raised and the actions that the parties had taken would be taken into account in the consideration of the matters to be considered under section 75(2) and in particular section 75(2)(o).
There is a clear issue between the parties which centres on the value to be ascribed to the financial contribution made by the husband some eleven years ago when his interest in the unit trust he shared with his parents was realised, and in particular, how that is reflected in the assets held by the parties today.
Also in issue in part is the value and extent of contributions otherwise made by the parties during the marriage.
The husband additionally asserts that the land is his livelihood and that whilst he might later procure some employment, he would not again be able to bring together assets in this form.
The wife says that she would wish for a situation in which it would be open to the husband to continue on his farm but says that if the husband is unable to pay for a reasonable property settlement without sale of the property, then that is what must occur. She is not averse, she says, in some time being allowed to the husband to raise money but not so much as was indicated in discussion might be granted.
The wife asserts that, subject to weather conditions, the husband could earn significantly more than she could.
The wife asserts that significant weight should be given to her continuing role as primary carer of the children notwithstanding their present ages of 17 and 15 years, and be reflected in an adjustment in her favour.

Background Facts

Where in this judgment I make statements of fact they are, unless otherwise specified, my findings of fact.
In 1964 the wife was born.
In 1967 the husband was born.
In February 1991 the parties commenced cohabitation.
Between 1991 and 1995 the husband worked for the P Trust.
In March 1991 the parties married.
At the date of the marriage the husband had an interest as a beneficiary under the P Trust, household contents, a motor vehicle, and a small amount of savings. The husband also had an entitlement to superannuation with the P Trust and shares in the C Co-operative. In addition, the husband says he had liabilities associated with his share in the P Trust.
There is an issue between the husband and the wife as to the nature and extent of the wife’s assets as at the date of the marriage, but the wife asserts that they comprised monies in bank accounts totalling $2,000, household contents to the value of $10,000, and superannuation of $3,000. The wife asserts she had no liabilities.
In 1992 the parties acquired a property at H. The property was acquired using $16,500 from the wife’s savings, which comprised the ten percent deposit. The balance was raised by a mortgage subsequently paid from the rentals procured from the property and payments made by the husband.
In September 1992 the parties’ daughter was born.
In April 1994 the parties’ son was born.
In June 1995 the company B Farm Pty Limited was registered.
In June 1995 the B Farm Trust was established.
In August 1995 the P Trust resolved to redeem the husband’s units in the Trust.
A letter was produced and sent to the husband’s parents in February 1996 by their accountants. That letter came to the conclusion that the assets and liabilities taken over from the P Trust and taken from the Casper Family Trust included realty and equipment of a net value (after a bank debt of $1,000,000), in the sum of $1,957,500.
Thereafter the husband worked on the property and on his assertion was primarily responsible for the running of the property through the B Farm Trust.
In 1997 the parties purchased the property known as A Farm for $250,000 as joint tenants (“the A Farm”). They subsequently expended some $470,000 rebuilding the home and raised that money by way of a mortgage advance. The property has a current agreed value of $600,000.
In February 2000 the parties sold their property at H for $260,000. The net proceeds of sale were, it seems, applied to the A Farm property.
In September 2004 the parties purchased a property at D for $1,200,000 (“the D property”). The purchase was funded by a mortgage advance from the ANZ bank in the sum of $1,000,000 and the balance was provided from the B Farm Trust.
The parties separated on 21 March 2007 and the wife occupied the D property whilst the husband continued to reside at the A Farm property.
In May 2007 the parties sold the D property for $1,175,000. After payment out of the amount due to the bank on mortgage the parties realised, after the payment of associated costs, the sum of $214,305. This was held in the trust account of Domain Legal in North Sydney, who acted on the sale.
In June 2007 the wife exchanged contracts for the purchase of a property at P (“the P property”) without any condition as to her ability to raise finance. The purchase price was $1,200,000. There are issues between the parties as to the circumstances surrounding the attempted purchase of this property.
In June 2007 the wife commenced proceedings seeking funds to be able to complete the purchase of the P property.
In July 2007 the wife moved out of the D property.
On 5 July 2007 Interim Orders were made in the following terms:
1.That orders be made in accordance with the Minute of Proposed Orders filed in Court today signed by Judicial Registrar Johnston, placed with the Court papers and attached hereto.
2. That all costs be reserved.
3.That both parties have leave to re-list these proceedings on
48 hours’ notice.
4.That the husband file and serve a Response to the Application for Final Orders not later than 27 July 2007.
5.That the parties attend a conciliation conference at 2:15 pm on the 19th October 2007.
MINUTE OF PROPOSED ORDERS
1.That the parties do all acts and things (including opening an overdraft account if required), to authorise the ANZ Bank to prepare loan documentation and sign all documents necessary, including loan documentation with the ANZ Bank, to complete the purchase of the property known as and situate at [P] (“the [P] property”) being Folio Identifier […] by 9 July 2007.
2.That the property is registered in the names of the Husband and Wife as joint tenants.
3.That the parties apply the net proceeds of the sale to the property known as and situate at [D](“the [D] property”) to the purchase of the [P] property.
4.That the Wife meet any shortfall between the purchase price of the [P] property and the amount of the ANZ Bank Loan and net proceeds of the [D] property.
5.That the Wife be responsible for the payment of the stamp duty on the [P] property.
6.That the parties pay in equal shares parts [sic] the conveyancing and real estate costs of the sale of the [D] property through the [B Farm] Trust.
7.That the parties pay in equal parts the conveyancing and real estate costs of the purchase of the [P] property through the [B Farm] Trust.
8.That the Wife has exclusive occupancy of the property until there is a final property settlement.
9.That the Husband and Wife pay the mortgage payments and all other outgoings on the property including council rates and water rates in equal shares, through the [B Farm] Trust, until such time as there is a final property settlement.
In a letter dated 13 August 2007 the wife was offered funds by the husband’s mother sufficient to complete the purchase of the property. This offer was on terms said by him to be more favourable than the proposed ANZ Bank advance set out in a letter dated 7 August 2007, but in any event on terms not too dissimilar. The wife declined to accept the offer of finance.
The parties were directed by the Orders to proceed with the ANZ financing proposal.
A letter was written to the ANZ bank by the husband’s solicitors tendering advice that careful thought should be given to any advance to the wife. In due course the offer of finance was withdrawn by the ANZ Bank it being claimed, inter alia, that it had not been accepted in time.
On 16 July 2007 the vendors of the P property issued a Notice to Complete and the wife negotiated a Deed of Variation Licence Agreement with the vendor operative until 1 November 2007. That agreement required the wife to pay rent in the sum of $7,800 for a three month period.
In due course the purchase failed and by this time the wife had committed at least $85,000 to the deposit, and stamp duty of $51,494 which was subsequently refunded. The wife also incurred legal, removal and storage costs, which were lost.
After 1 April 2008 the sum of $100,000 of the net proceeds of the sale of the D property was paid into the trust account of the wife’s solicitors, on account of her legal expenses. The sum of $24,000 was released to the wife to meet her immediate living expenses and the balance of $90,305.44 was paid to the husband.
On 16 September 2008 a Decree Nisi of the parties’ marriage became absolute.
In July 2008 the wife moved into a property at M (“the M property”). The wife entered into a contract with the owner which gave the wife an option to purchase the property within the next twelve months. The purchase price was $1,395,000. If the purchase does not complete the wife forfeits the option fee of $20,000.

The Issues

Should the Court, in the exercise of its discretion, take into account in making an order amounts said to have been wasted by them or either of them and their paid legal costs, and should such adjustment be by way of adding notional assets to the balance sheet or otherwise?
What weight should be given to the parties’ relevant contributions to the acquisition, conservation and improvement of the property of the parties or either of them? In particular, what weight should be given to the contribution by the husband of assets held by the husband prior to marriage, given their current form and value?
What weight should be given to the wife’s contributions?
What adjustments should be made, if any, by reason of the factors referred to in section 75(2) of the Family Law Act 1975 (Cth) (“the Act”)?
What order will do justice and equity between the parties?

Relevant Law

The Court is required by the authorities and the statute to take a four step approach to the consideration of these issues.
It must first determine what the property of the parties, or either of them, is.
It must, in short, then determine the contributions of the parties to the acquisition, conservation and improvement of the properties both financially and non-financially and their like contributions of a non-financial nature.
The Court must determine the contributions made by each of the parties to the welfare of the family and, in the exercise of its discretion, consider the relative value of those contributions and the parties’ entitlements based upon those values.
The Court must then consider what adjustment, if any, should be made to that determination by reason of any relevant factors under section 75(2) of the Act and, having regard to that adjustment, what the relevant entitlements of the parties are.
It must then be considered by the Court whether justice and equity requires any adjustment to that entitlement or any other particular form of order, once again in the exercise of a broad discretion.

Property matters

The first step I must undertake is to identify the property of the parties or either of them available for division between them.
The Court at the commencement of the hearing was provided with the balance sheet for its consideration.

The Balance Sheet

At my request each of the counsel at the conclusion of the hearing submitted a draft balance sheet. The husband’s counsel submitted two such balance sheets. The existence of the alternatives was to accommodate the view that I have taken - that the inclusion of liabilities from and to a family trust, the B Farm Trust (“the Trust”), which the husband has accepted is their alter ego, is of no consequence in the determination of what the assets and liabilities are. One cannot owe money to oneself and equally, if money is owed by such an entity then in a balance sheet given the concession made, the entries would be obliged to appear as both an asset and a liability.

They had much in common with the balance sheet submitted by the wife, however there were differences. The wife included a debt due to the Trust said previously to have been the alter ego of the parties, but now of the husband. I did not include the debt due as an asset for the reasons set forth above.
The wife’s list omitted to include property, plant and equipment of the trust and Telstra shares and certain other assets. Significantly, the assets asserted by the husband did include “add backs”. As indicated earlier I will not add back amounts which do not exist to a balance sheet but will take into account those items in a consideration of matters arising under the provisions of the Act, particularly in the exercise of the requirement that justice and equity be done and under section 75(2)(o).
For the purpose of this judgment I set out the alternative balance sheet provided by the husband. I will make adjustments to it as I consider appropriate on the evidence.

Assets	Husband’s value ($)
“[B Farm]” (including improvements) (joint)	9,750,000
Property, plant and equipment (30 June 2009)	715,353
Property known as “[A Farm]” (joint)	600,000
Contents – “[A Farm]” (h)	20,000
Trading account ANZ […] (9 September 2009)	Nil
Equity in [produce stores] (9 September 2009)	249,502
[N] Co-Op Shares (h)	31,236
AWB shares (joint)	6,418
Newscorp shares (joint)	8,174
Westfarmers shares (joint)	3,987
Telstra shares (joint)	2,292
[P] Superannuation Fund (h)	99,720
Funds taken by wife	170,463
Interim disbursal of funds to wife (w)	200,000
Further pre-disposition of funds (1 April 2008) (w)	124,000
First State Superannuation (w)	20,046
Household contents (w)	50,000
Motor vehicle (w) contained in property P/E above
Total	$12,051,191

Liabilities	Husband’s value ($)
Loan [P] Trust (30 June 2009)	6,483
GST payable (30 June 2009)	15,873
Equipment finance creditors (30 June 2009)	193,918
Trade creditors (30 June 2009)	430,470
Bank bills ANZ […] (30 June 2009)	3,418,000
Seasonal facility ANZ (30 June 2009)	1,490,000
Equipment finance creditors (30 June 2009)	99,958
Debt to [R & J Casper] (8 September 2009) (h)	55,100
Total	$5,709,802

Net Assets	Husband’s value ($)
Total	$6,341,389

In relation to that balance sheet, I decline to include the sum of $170,463 which constitutes a sum which has been utilised or wasted by the wife and which were payments which depleted the available pool. I will take into account in my determination of adjustments based on contribution the existence of these items and the conduct in relation to the alleged waste of each of the husband and wife.
Part of the amount claimed, and on which much time was spent in the hearing, was the amount of the deposit and related costs lost by the wife on the purchase of the P property.
It seems clear that the wife exchanged contracts when she did not have a clear commitment to the funding for the purchase but simply assumed that it would be provided. Interim proceedings were commenced and the parties were subject to an order that they sign all documents with the ANZ Bank to permit of a loan being made to the husband and wife. In the event, that loan was declined in circumstances where the husband is said to have engineered that result. A letter was tendered into evidence and which, in summary and in part, says; “the bank should seriously consider its position in relation to the provision of finance”.
There is no doubt that the husband complied with the letter of the interim order but, it appears, perhaps not the spirit of it.
He did, however, say that he was genuinely concerned at the ability to pay the amount including the interest charged by the bank over the longer term of that loan (with whom he had major business financing) and submitted to the wife a proposal from his mother to make the like advance on different terms.
On anyone’s account of those terms, had the wife agreed to accept them, she would have hardly been out of pocket given the likely short term nature of the advance. She says simplistically that she did not accept the offer from the husband’s mother because that was not what the order said and she was complying with the order.
Those she instructed would have known that by the preparation of a consent minute of order, the terms of the order could have been changed in but a very short time to allow the wife to take the fund up without breaching the order. I do not accept as valid the suggestion of the wife that I should not take into account her failure to do so. It seems clear that she in large measure was the author of the loss.
Equally I do not think that the husband was blameless in this regard. In any event, I will take into account these circumstances and the individual conduct of the parties giving rise to the loss in the exercise of my discretion.
Associated with the loss of the deposit in the sum of $85,000 are other expenses which I will also take into account.
There was a discussion between the parties and different balance sheets were produced which, on the husband’s part, have regard to the concession he makes as to the alter ego status of the trust.
The wife’s counsel argued that the problem with that concession is that it does not take into account the taxation losses of the Trust and their availability to the Trust as an asset.
In that regard, of course, the utilisation and value of the tax losses depend on their currency and the existence of profit against which they might be applied to the benefit of the trust. It is suggested on both sides that the trust should be left in the dominion of the husband.
Given the risk attached to the rural locality of this enterprise, particularly its dependence on weather, it seems to me that it is by no means certain that any or all of them will be utilised before they become stale.
I accept that there is a possibility that some benefit will flow to the Trust and the husband by reason of the Trust’s possession of the losses, providing that they are not expired. To be worth something, they would have to be applied to a taxable income generated by the Trust or an enterprise of the like nature.
I will in any event take into account in the exercise of my discretion the existence of the losses said to be $400,000, the absence of evidence as to when they all or any of them expire and the uncertainty of applying them to taxable profits. I will take into account the possibility of their being of some value to the husband subject to all the conditions precedent to their application being met and give them the weighting in my exercise of discretion that all those factors dictate.
Both parties sought to add to the balance sheet paid costs, namely that the wife received and applied the sum of $100,000 to her legal costs and the husband the sum of approximately $90,000 from the proceeds of sale of the D property.
The wife says that the additional sum received by her should not be added back since they amounted to $24,000 and the husband had been ordered to provide to the wife the sum of $3,000 per month and had not done so since January 2007. I do not propose to add back the sum of $24,000.
It was submitted by the wife that if the husband’s concession in relation to the descriptor of the Trust as his alter ego were adopted, then monies due to him and by him and the wife should be excluded from consideration. With that approach and that proposition I agree. Even if the wife said she would pay her liability it would be simply shifting the assets, not changing the pool.

The husband asserts that the following asset should be taken into account, namely the monies which the wife insisted in receiving from the sale of produce in the sum of $200,000 and which should be notionally added back to the pool since her expenditure of that money is not fully explained. In any event, the husband placed the balance of the share of the proceeds of that sale to the credit of the Trust. I will take into account the differential disposition of the produce sale proceeds and note that the wife has received property to the value of $200,000.
The husband seeks to add back two amounts of funds taken by the wife namely $170,463 and a predisposition of funds to the wife in the sum of $124,000. I will not take these sums into account in this way. The requests arise out of the following circumstances, namely payments under Orders made on 1 April 2008 which provided for the wife to receive by way of partial property settlement the sum of $100,000 followed by a further payment of $24,000. The categorisation of those payments as a part property settlement or otherwise was to be left to the trial. Of those amounts the wife’s evidence is that the sum of $100,000 was applied towards her legal fees. The paid legal fees will be added back in accordance with common practice.
The husband asserts that the figure of $170,463 is comprised of cheques drawn from the parties’ joint bank account and funds withdrawn upon the closure of same account; NRMA share proceeds; the forfeited deposit and associated legal expenses on the P property; rent paid; monthly drawings; and Visa card and Telstra expenses paid by the husband. As to this claim I decline to add it back but will take it into account under s75(2).
The husband sought to adopt, in relation to the value of the plant, property and equipment, the written down value in the books of the Trust as at

30 June 2009 – that being the sum of $715,353. However, Addendum 4 to the affidavit of Mr N provides the value of $907,000. I adopt this value which is also adopted by valuer Mr G in his report, and which was Exhibit 1 in these proceedings.

I find the assets and liabilities of the parties are as follows:

Assets	($)
B Farm (joint)	9,750,000
Plant and equipment at valuation	907,000
A Farm (joint)	600,000
Contents A Farm (h)	20,000
Equity in produce stores	249,502
C Co-operative Shares (h)	31,236
AWB shares (joint)	6,418
Westfarmers Shares (joint)	3,987
Telstra Shares (joint)	2,292
Newscorp shares (joint)	8,174
P Superannuation Fund (h)	99,720
Household contents of the wife	50,000
First State Superannuation (w)	20,046
Interim dispersal of assets to the wife	200,000
Wife’s legal fees	100,000
Husbands paid legal costs	90,305
Total Assets	$12,138,680
Liabilities
Loan P Trust	6,483
GST Payable	15,873
Equipment Finance Creditors	193,918
Trade Creditors	430,470
Bank Bills ANZ	3,418,000
Seasonal Facility ANZ	1,490,000
Equipment Finance Creditors	99,958
Debt to R & J Casper (husband)	55,100
Total Liabilities	$5,709,802
Nett Asset Pool (inclusive of Superannuation):	$6,428,878

Section 79(4) contributions to date of separation

Initial Contributions

There was common ground that the husband had significant assets at the date of marriage, comprising units in a family trust which he later brought into the marriage, in the form of the property called “B Farm”, some 11 years prior to separation.
At that time B Farm had a value together with plant and equipment of close to $2,000,000. That value was reached considering the equipment at written down value. In addition, the husband had a credit beneficiary account in the Casper Trust of some $48,000, and the wife of approximately $4,000. The amount was significant and the amount is presently represented in a farming property to the value of $9,750,000 of which a significant part is represented by what the husband originally bought into the marriage.
True it is that the property has, in part, by the application of labour and capital, increased in value, but it is also true and notorious that over the period of time since 1995 there has been a substantial devaluation of money. I think it is appropriate to recognise that the intrinsic value of the property has increased in part by the effluxion of time and the effect that has had in increasing the dollar value of the property. That recognition puts into better perspective, as a proportion of the current value of the property, the value of the contribution of the husband in real terms.
It is asserted by the wife that at the date of the marriage, she had net assets and superannuation totalling $15,000; comprising $2,000 of monies in bank accounts, $10,000 of furniture, appliances and household items, and $3,000 of superannuation.

Contributions to date of separation otherwise

The marriage was of sixteen years’ duration. The parties had differential roles throughout the marriage. The wife was the primary carer of the children although the husband, consistent with his engagement in other activities, no doubt played an important role in their lives.
I accept, however, that the mother was the primary carer of the children. That is not to say that that was the wife’s only role during the marriage.
The wife was involved actively in discussions concerning the operation of the farm and undertook a number of courses, she said, to better equip her in a management role. In her involvement with the farm she contributed to decisions made in relation to the operation of the farm and supported the enterprise primarily and significantly undertaken by the husband.

Section 79(4) contributions post separation

Since separation, the wife has continued in her role as primary carer of the children.
Since separation, the husband has continued in his primary role as the manager of the farm.

Conclusion based on contribution

All in all I assess the contributions of the parties to the acquisition, conservation and improvement of the property of the parties to the marriage or either of them, including such property which is no longer the property of the parties to the marriage or either of them, to be 30% for the wife and 70% for the husband.

Section 75(2) considerations

The wife is a school teacher and it appears that in that role her earning capacity is in the order of $50,000 to $70,000 per annum at the present time. I accept that in good times the husband’s earning capacity is superior to that of the wife but, of course, I am not able to predict when the good times and bad times in terms of faming income might occur.
The wife asserts that she should have an adjustment by reason of her ongoing care of the children. One will be adult next year and the other is aged 15 years. The elder child currently attends school in P and resides with the wife, and it is the wife’s evidence that the younger child will complete his current school year at the Sydney boarding school he currently attends and then move to P to live with the wife and attend school there.I think that some adjustment might be made upon these bases but, given the ages of the children, the amount will not be great.
I note that I am asked by the husband to take into account the following matters:
a)Following separation the wife removed funds from an ANZ joint account in the parties’ joint names in the sum of $4,542.
b)Following separation the wife received proceeds of the sale of NRMA shares amounting to $1,485.
c)The wife caused the loss of $85,000 on the deposit on the purchase of the P property. The wife also seeks that the loss be taken into account and says it was by reason of the husband undermining the ANZ bank advance. For the reasons advanced above, I have taken into account the part each had to play in the loss, but note in particular that it would not have occurred had the wife accepted the proposal of the husband’s mother to finance the purchase.
d)The wife received monthly drawings between April and December 2007 in the total sum of $21,000.
e)The husband caused rent to be paid on the wife’s behalf in the sum of $7,000
f)Cheques were drawn by the wife on the parties’ joint ANZ account until closure of the account.
g)The wife’s credit card expenses were paid by the husband to a total of $20,100.
h)The husband was obliged to pay some $13,413 of Telstra telephone expenses on behalf of the wife.
i)The parties’ available assets were diminished by reason of costs incurred by the ANZ Bank with their solicitors, Gadens, in responding to claims made by the wife. The amount involved was $10,215.
j)The wife received an interim distribution of $124,000 of which all but $24,000 was spent in legal fees and which have been dealt with by me in the balance sheet. The balance seems to have been utilised in the wife’s living expenses, which I will not take into account. I note that the husband was obliged pursuant to orders of this court to pay an amount of $3,000 per month to the wife and that from the end of 2007 he did not pay that amount. I propose that that order will be discharged from the date to which it stands paid.
I take into account in favour of the husband the amounts referred to in paragraph (i) and part of paragraph (h) above and part of the loss referred to in paragraph (c) above. However, it seems that much of the balance of the payments were utilised by the wife in reasonably sustaining herself and meeting her living expenses at a time when the husband had practically sole dominion and control over the parties’ assets.
I note the position in relation to each party’s potential liability for net unpaid legal fees and take that into account in my determination.
I take into account that in the event that the husband continues farming his accumulated taxation losses might be of some benefit to him, but I give that fact little weight by reason of the matters referred to above.

Conclusion on section 75(2)

For all the reasons referred to above, I conclude there should be a further adjustment in the wife’s favour of 2.5%.
The result of the above determination will see the wife receive 32.5% of the parties’ assets and the husband receive 67.5%.

Just and equitable

I find that the justice of this case requires the Court to seek to establish a means whereby, doing justice to the wife, the husband can retain his working farm.
Accordingly, I propose that the amount payable to the wife be paid as to $1,395,000 forthwith and, so that she can complete her purchase of the property, as to $324,339.35 within a period of 12 months from today’s date. The husband may pay the said amount by instalments equal or otherwise over that period.
The amount so paid will bear interest as and from the date of these orders at the rate of 5% per annum on the balances owing from time to time. The amount due for interest is to be paid to the wife on the first day of each and every month commencing on 1 November 2009.
I propose that the husband will charge all his right title and interest in and to the A Farm property and the B Farm property to secure the payment of the monies hereby ordered to be paid by him to the wife, subject to the priority to that charge of existing charges being made and subject to the right of the husband to raise funds for the payment of expenses incurred in the ordinary course of his business as a farmer.
On that basis, I find that the result proposed is just and equitable.

Orders which should be made

I propose orders which will give effect to the following division of the assets referred to above.
The wife will receive:

Assets	($)	($)
Household contents (w)	50,000
First State Superannuation (w)	20,046
Interim dispersal of assets to the wife	200,000
Paid legal fees (w)	100,000	370,046
Amount payable by the husband to the wife	1,719,339.35
Total Assets	$2,089,385.35
Liabilities
Otherwise taken into account under s75(2)	Nil	Nil
Total Liabilities	Nil
Net Assets	$2,089,385.35

The husband will receive:

Assets	($)	($)
B Farm (joint)	9,750,000
Plant and equipment at valuation	907,000
A Farm (joint)	600,000
Contents A Farm (h)	20,000
Equity in produce stores	249,502
C Co-operative Shares (h)	31,236
AWB shares (joint)	6,418
Westfarmers shares (joint)	3,987
Telstra shares (joint)	2,292
Newscorp shares (joint)	8,174
P Superannuation Fund (h)	99,720
Paid legal fees (h)	90,305	11,768,634
Total Assets	$11,768,634
Liabilities
Loan P Trust	6,483
GST Payable	15,873
Equipment Finance Creditors	193,918
Trade Creditors	430,470
Bank Bills ANZ	3,418,000
Seasonal Facility ANZ	1,490,000
Equipment Finance Creditors	99,958
Debt to R & J Casper (h)	55,100
Amount payable by the husband to the wife	1,719,339.35	7,429,141.35
Total Liabilities	$7,429,141.35
Net Assets	$4,339,492.65

These orders are such that will permit the wife to complete her purchase and allow the husband time to pay the balance, and provide him with interest on the capital to the date of its payment. I think the interest rate I have determined is appropriate in the circumstances and the overall result is just and equitable as between the parties.

Costs

Should there be any application for an order for costs then any applicant party must file and serve within 28 days of the orders herein made any such application that they might wish to make. Any application is to be accompanied by any affidavit material setting forth any evidence in chief on which they wish to rely together with any written submission in support of that application. Any respondent party must file within a further 14 days a response, together with a written submission in support of that response, and any affidavit material, setting forth any evidence in chief on which they wish to rely. Any applicant will have a further 7 days in which to file any submission or evidence in reply.

I certify that the preceding one-hundred and sixteen (116) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.

Associate:

Date: 15 October 2009

[2009] FamCA 989

15 October 2009

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Costs

Remedies

Constructive Trust

Charge

Consent