COLLINS & ANDREWS
[2013] FCCA 1488
•8 November 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COLLINS & ANDREWS | [2013] FCCA 1488 |
| Catchwords: FAMILY LAW – Property – where the liabilities exceed the property – just and equitable – contributions – unsecured creditors. CHILD SUPPORT – Departure order – whether a lump sum or periodic payment is appropriate. |
| Legislation: Family Law Act 1975, ss.79, 90SM, 90SF, Child Support (Assessment)Act 1989, ss.117, 124 |
| Bendeich & Bendeich (1993) FLC 92-355 Bilftoft & Bilftoft (1995) FLC 92 - 614 Browne & Green (1999) FLC 92-873 C & C (2005) FLC 93-220 Clives & Clives (2008) FLC 93-385 D & D [2005] FamCA 356 DH & RM [2004] FMCAfam 74 Dwyer v McGuire (1993)FLC 92-420 Kowaliw & Kowaliw (1981) FLC 91-902 Gyselman & Gyselman (1982) FLC 92-279 Af Petersens & Af Petersens (1981) FLC 91-095 Norbis & Norbis (1986) FLC 91-712 Pierce & Pierce (1999) FLC 92-844 Prpic & Prpic (1995) FLC 92-574 Stanford & Stanford (2012) FLC 93-518 Trustee of the Property of G Lemnos & Lemnos & Another (2009) FLC 93 – 394 Anthony Dickey, Family Law (5th ed, Lawbook Co., 2007) |
| Applicant: | MS COLLINS |
| Respondent: | MR ANDREWS |
| File Number: | HBC 887 of 2011 |
| Judgment of: | Judge Baker |
| Hearing dates: | 27 and 28 May 2013, 25 June 2013 |
| Date of Last Submission: | 27 September 2013 |
| Delivered at: | Hobart |
| Delivered on: | 8 November 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Tresize |
| Solicitors for the Applicant: | M+K Dobson Mitchell & Allport |
| Counsel for the Respondent: | Mr Geason |
| Solicitors for the Respondent: | Butler Mcintyre & Butler |
ORDERS
That within 120 days the Applicant transfer all her right, title and interest in the property situated at Property B to the Respondent (“the property”).
That contemporaneously with the transfer referred to in paragraph 1 the Respondent do all such acts and things to refinance the mortgage to (omitted) Bank secured over the property and indemnify the Applicant in respect of the mortgage.
That in the event that the Respondent fails to comply with paragraph 2, the parties do all acts and things and sign all documents necessary to effect a sale of the property:
(a)The listing price shall be agreed between the parties and failing agreement as determined by a valuer nominated by the President of the Real Estate Institute of Tasmania.
(b)The property shall be listed for sale by private treaty with an agent to be agreed and failing agreement as determined by a valuer nominated by the President of the Real Estate Institute of Tasmania.
The proceeds of sale be distributed as follows:
(a)To discharge the (omitted) Bank mortgage and any other encumbrances affecting the property;
(b)To pay all real estate agent’s costs, commissions and expenses of the sale of the property;
(c)To pay any council rates outstanding in respect of the property;
(d)To pay the solicitor’s costs in relation to the sale of the property;
(e)To pay the unsecured liabilities of (omitted) business and (omitted) business, proof of payment to be provided to the applicant within 7 days thereof.
Pending completion of the sale of the property, the respondent be solely responsible for the payment of the principal and interest instalments of the (omitted) Bank mortgage.
Pending completion of the sale of the property, the respondent be liable for and indemnify the applicant against all payments and liabilities in respect of the property including but not limited to all rates, taxes and outgoings of whatsoever nature and indemnify and keep the applicant indemnified in respect thereof.
The Respondent relinquish in favour of the Applicant any right, title or interest he may have in the following:
(a)The Applicant's (omitted) Fund superannuation entitlement;
(b)Any savings of the Applicant;
(c)The Applicant’s motor vehicle.
The Applicant relinquish in favour of the Respondent any right, title or interest she may have in the following:
(a)(omitted) Pty Ltd,
(b)(omitted) business
(c)(omitted) business.
(d)Jetski
(e)Debtors
(f)Livestock
(g)Plant and equipment
(h)Any savings of the respondent
Unless otherwise specified in this order:
(a)Each party will be solely entitled to the exclusion of the other to all property in the possession and/or name of that party.
(b)Each party will be solely liable for and indemnify the other against any liability effecting or encumbering any form of property to which that party is entitled pursuant to this order.
(c)Each party will remain solely liable for their respective debts.
The existing child support assessment in relation to the two children X born (omitted) 2004 and Y born (omitted) 2006 be departed from.
For the period 1 July 2013 to 30 June 2017 the child support payable by the respondent for the said children be set at $144.23 per week per child ($7,500.00 per annum).
The respondent pay the child support in order 11 by annual payments in advance as follows:
(a)$15,000.00 on or before 90 days.
(b)$15,000.00 on 1 July 2014, 1 July 2015 and 1 July 2016.
IT IS NOTED that publication of this judgment under the pseudonym Collins & Andrews is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT HOBART |
HBC 887 of 2011
| MS COLLINS |
Applicant
And
| MR ANDREWS |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a property application made pursuant to s.90SM of the Family Law Act1975 as amended (“the Act”) by Ms Collins (“the applicant”). She also applied for a child support departure order pursuant to the Child Support Assessment Act1989 (“the Assessment Act”). In his response, Mr Andrews (“the respondent”) sought parenting orders in respect of the two children of the relationship, X born (omitted) 2004 and Y born (omitted) 2006.
At the commencement of the hearing, consent parenting orders were made. The orders essentially provide that the children live with their mother; X spend time with the father each alternate weekend and one half of school holiday periods; and Y spend each alternate weekends with the father, such time to continue during school holiday periods.
Background
The parties commenced cohabitation in 2000 and separated in September 2011.
The applicant is a (occupation omitted) and works part-time. The children live with her in Hobart and spend time with the respondent. The child Y has special needs. The applicant and the children are currently living with the applicant's mother in Hobart. The mother has a new partner, but does not live with him.
The respondent is a farmer. He has remained living on and working at the farming property. The property is near (omitted) in the (omitted) of Tasmania. The father has re-partnered and lives with his partner when in Hobart.
The applicant filed her application on 4 November 2011 in the Family Court. It was transferred to this Court and its first return date was 3 July 2012, when trial directions were made.
On 9 January 2013, the applicant filed an application in a case seeking an order that the respondent be restrained from dealing with or disposing of any of the sale proceeds of crops, save for the purpose of discharging liabilities as agreed with the applicant, and/or investing the net sale proceeds in an investment account in the joint names and control of the parties.
The applicant said that:
Mr Andrews’ lucrative (omitted) crops are due to be harvested in late February/March 2013… The gross proceeds of those crops are usually in the many hundreds of thousands of dollars each and are likely to exceed the total of $1 million. I accept that Mr Andrews will have liabilities to discharge from the gross proceeds but wish to ensure that the net proceeds are preserved pending the final hearing of my application for property adjustment and child support orders.”[1]
[1] Paragraph 68, of Applicant’s affidavit, filed 9 January 2013.
When the respondent filed his trial affidavit on 8 February 2013, he said that he had received approximately $306,000.00 in respect of the sale of (omitted) crops and various debts were paid with the funds. He said that assuming the further harvest of (omitted) is successful; a further $500,000.00 will be received.
By consent an order was made on 15 February 2013 that the respondent must not apply the sale proceeds of crops harvested, other than towards the reasonable day-to-day running of the farming operations of (omitted) business, (omitted) business, and (omitted) Pty Ltd.
At the hearing, the respondent gave evidence that the (omitted) crops had failed. The total sale proceeds received for the (omitted) crops were $513,000.00, rather than the sum of $1.2 million gross, which he had budgeted for. This meant that the value of the net property of the parties diminished, because the debts incurred to produce income were not repaid.
The debts are incurred each year at the commencement of the season for planting crops and then repaid when the crops are sold. In 2012, the (omitted) crop was successful and much of the debt was repaid and renewed in 2012, to be repaid after the receipt of the (omitted) crop in February 2013. Because the crop was unsuccessful, the debts were not repaid in full. The respondent is farming his way out of the debt and expects to be in a positive position again in 2014.
The applicant contended that the unsecured debts incurred by the respondent should be paid by him because he will be able to pay them off at the end of next season and retain all the assets debt free.
After the hearing, I asked for submissions about whether the matter should be adjourned until the respondent had “farmed out the debt.” Counsel for the applicant submitted that there should not be an adjournment because the respondent will have no incentive to work out the debt.
Counsel for the respondent also submitted that there should not be an adjournment, as the respondent needed control over the property, so as to dispose of the debt.
Proposals
The applicant proposed that the net property of the parties be divided on a 70/30% basis in her favour. She sought an order that the farming property, "(omitted)," and the plant and equipment be sold; each party be entitled to the exclusion of the other to all property in the possession of that party; each party be solely liable for and indemnify the other against any liability affecting and or encumbering any form of property to which that party is entitled; and each party remain solely liable for their respective debts. During the hearing, Counsel for the applicant indicated that it is open to the Court to give the respondent an opportunity to purchase the applicant’s interest in the property before sale is ordered.
In respect of the application for departure from the administrative assessment child support for the two children, the applicant proposed that the annual rate of child support payable by the respondent be varied to $15,000.00 per annum, payable as and from 1 July 2013. She sought an order that the payment of child support be otherwise than in the form of periodic amounts and sought a lump sum payment of $60,000.00 for the period commencing 1 July 2013 until and including 30 June 2017.
The respondent proposed that the applicant transfer to him all her right title and interest in the property known as (omitted) and that he arrange for her to be released from the mortgage to (omitted) Bank encumbering the property. If he is unable to obtain her release from the mortgage within 120 days, he sought an order for the sale of the property. He proposed that the sale proceeds essentially be applied to discharge the mortgage and the balance be paid towards outstanding liabilities of (omitted) business and/or (omitted) business and/or (omitted) Pty Ltd. He sought that the applicant relinquish in favour of him any interest in (omitted) Pty Ltd, (omitted) business, (omitted) business and all other property in the respondent’s name.
The respondent’s position was that there is negative net property. If he can refinance the mortgage to (omitted) Bank and the applicant can be released from it, he will assume responsibility for all the debt and attempt to “farm his way out.” The respondent proposed that the applicant retain her superannuation, her motor vehicle and savings.
Issues
The main issue was whether the unsecured liabilities of (omitted) business and (omitted) business should be disregarded or discounted in the property division.
The applicant contended that the unsecured liabilities “should not be taken into account in the property adjustment and/or those creditors should not have priority to her rights and entitlements arising under Section 90 SM.”[2] It was also submitted that because the debts were incurred after separation or were unreasonable, they should not be taken into account.
[2] Biltoft & Biltoft (1995) FLC 92 – 614.
The respondent contended that all the unsecured liabilities should be taken into account, because they are certain and enforceable. The respondent contended that they are all liabilities which were reasonably incurred.
The contributions of the parties were also in issue. Counsel for the applicant firstly submitted that the contributions of the parties should be assessed as equal. In his closing address, Counsel for the applicant submitted that it is open for the Court to find that the applicant’s contributions exceeded those of the respondent to the extent of 55%.
Counsel for the respondent submitted that if the respondent’s asset and liability position is accepted, there will be a negative position and there is no percentage division possible. If his position is not accepted, he submitted that the contributions of the respondent were greater than those of the applicant to the extent of 65%, because of his initial contributions and his financial and non-financial contributions towards the farm and its enterprises.
After the hearing, I asked Counsel for submissions about what order I should make if I found that the unsecured liabilities could not be disregarded or discounted. Counsel for the applicant submitted that all the property should be sold, as that is the only way that funds can come from the pool. He submitted that the applicant should be paid in priority to the unsecured creditors.
Counsel for the respondent submitted that if a sale of the property was ordered, and the applicant was paid in priority to the creditors, the respondent will be left with all the debt, without any funds to pay the creditors.
In regard to the child support issue, during the hearing the respondent agreed that there are special circumstances which warrant a departure from the administrative assessment of child support. He agreed to set the amount of child support for both children at $15,000.00 per annum for a period of four years. The issue remaining in dispute was whether a lump sum payment of child support of $60,000.00 should be paid by the respondent, rather than payments of $15,000.00 per annum.
Evidence
The applicant relied upon:
·her affidavit filed 9 January 2013;
·her financial statement filed 8 January 2013; and
·the affidavit of Ms V filed 8 January 2013
The respondent relied upon;
·his affidavit filed 8 February 2013; and
·his financial statement filed 8 February 2013.
Both the applicant and respondent were cross-examined. Ms V was not required for cross-examination.
Relevant law
I am satisfied that this Court has jurisdiction to hear the application pursuant to Part VIII AB of the Act. The parties lived in a de facto relationship between 2000 and 2011. Both parties were ordinarily resident in Tasmania during their relationship.
Section 90SM(1) of the Act provides that in property settlement proceedings after the breakdown of a de facto relationship, the Court may make such order as it considers appropriate. The Court must not make an order unless it is satisfied that in all the circumstances it is just and equitable to do so.
The considerations pursuant to s.79 of the Act in respect of married parties and, the considerations pursuant to s.90SM in respect of parties in de facto relationships, are similar. I am of the view that it is appropriate to apply to this matter the principles that have evolved in matrimonial property decisions.
In light of the decision of the High Court in Stanford & Stanford[3], the Court must firstly consider whether it is just and equitable to make a property order by identifying the existing legal and equitable interests of the parties in the property. Having regard to those existing interests, the Court must be satisfied that it is just and equitable to make a property settlement order.[4]
[3] (2012) FLC 93-518.
[4] Ibid at para.37.
The High Court said that it should not be assumed that one or other party has the right to have the property of the parties divided only fixed by reference to the various matters set out in s.79(4)[5]. There must be a separate consideration of s.79(2). The Court said that when the parties are no longer living in a marital relationship and there will no longer be a common use of property, the just and equitable requirement will be easily satisfied.[6]
[5] Ibid at para.40.
[6] Ibid at para.42.
In Bevan & Bevan[7] the Full Court of the Family Court considered the High Court’s decision in Stanford & Stanford[8] and provided some guidance as to its implications in property settlement matters. Their Honours Bryant CJ and Thackray J discussed the four stage or step process which has been well established and referred to the line of cases cited in Hickey & Hickey[9]. Their Honours said that although the High Court did not disapprove of the four step process, they accept it was not approved either, and the decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.[10] Their Honours said:
Stanford will also serve as a reminder that the four step process merely illuminates the path to the ultimate result. Any future restatement of that process should incorporate acceptance of the fact that the power to make any order adjusting property interests is conditioned upon the Court finding that it is just and equitable to make an order.
It follows that judges would be well advised to avoid what we consider to be arid discussion of the “stage in the process” at which adjustments are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.[11]
[7] [2013] FamCAFC 116.
[8] (2012) FLC 93-518.
[9] (2003) FLC 93-143.
[10] Bevan & Bevan [2013] FamCAFC 116, at para.65.
[11] Bevan & Bevan [2013] FamCAFC 116, at paras.71 & 72.
Their Honours continued:
The High Court in Stanford has laid down three “fundamental propositions” which will provide useful guidance to trial judges in approaching the task under s 79. These were recited above, and could be summarised thus:
1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.[12]
[12] Ibid, at para.73.
Their Honours said that it is necessary for it to be shown that the trial judge has expressly, or by clear implication, answered the preliminary question in the affirmative, before making an order altering existing interests in property. This involves the exercise of judicial discretion, after examining a range of potentially competing considerations. Their Honours continued:
Just as the expression “ just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it will be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s.79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of S.79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection (emphasis added)[13]
[13] Ibid at para.84.
Their Honours warned against conflating the issues arising under s.79(2) and s.79(4), but recognised that the issues are intertwined because the text of the Act links them.[14]
[14] Ibid at para.87.
Their Honours said:
In our view, it will be less likely that the separate issues arising under s.79(2) and s.79(4) will be conflated if judges refrain from evaluating contributions and other relevant factors in percentage or monetary terms until they have first determined that it will be just and equitable to make an order. Ultimately, however, appellate error will not be demonstrated if it is possible to ascertain, either by reference to an express finding or by necessary inference, that the trial judge has given separate consideration to the two issues.[15]
[15] Ibid at para.89.
The Property and Liabilities
A joint “schedule of assets and liabilities” was provided by the parties at the commencement of the hearing. It is set out as follows:
Assets Respondent Applicant
Property B (A & R) 475, 000.00 475, 000.00
(omitted) Pty Ltd. (R) real estate 235, 000.00 235, 000.00
- (omitted)25, 000.00 25, 000.00
- (omitted)12, 000.00 12, 000.00
Respondent’s bank 7, 010.00 7, 010.00
Applicant’s bank 2, 000.00 200.00
Jetski (R)5, 000.00 5, 000.00
Debtors (R)11, 250.00 11, 250.00
Livestock (R) 120, 440.00 724, 795.00
Plant and Equipment (R) 603, 800.00 670, 795.00
Applicant’s car 1, 800.00 1, 800.00
Applicant's (omitted) Fund 44, 825.00 44, 825.00
Liabilities
(omitted) Bank (A & R) 395, 400.00 395, 400.00
(omitted) Bank (1) (A & R) 109, 000.00 109, 000.00
(omitted) Bank (2) (A & R) 75, 100.00 75, 100.00
(omitted) Bank Overdraft* 48, 597.00 48, 597.00
(omitted) Bank Visa* 35, 678.00 35, 678.00
(omitted) Bank Visa* 35, 175.00 35, 175.00
(omitted) Credit Line* 9, 935.00 9, 935.00
(omitted)* 60, 050.00 60, 050.00
(omitted) Finance* 74, 530.00 74, 530.00
(omitted) equipment* 233, 180.00 233, 180.00
(omitted) equipment* 93, 753.00 93, 753.00
(omitted) – (Bank)* 10, 030.00 10, 030.00
(omitted)* 55, 500.00 Nil.
(omitted)* 95, 670.00 95, 670.00
(omitted)* 120, 375.00 120, 375.00
ATO* 81, 100.00 81, 100.00
(omitted) rent* 81, 600.00 Nil.
* “Applicant contends these debts should not have priority to her claim.”
There were no disputes about the legal or equitable interests of the parties in the property.
The farming land owned by (omitted) Pty Ltd was purchased by the respondent’s great-great-great grandfather in (omitted). The respondent inherited it from his father in 2006. There are no houses on the real estate owned by (omitted) Pty Ltd.
Except for the homestead, which the parties identified as Property B, (omitted) has always been owned by (omitted) Pty Ltd. The respondent is the sole Director and Secretary of (omitted) Pty Ltd. The shares in (omitted) Pty Ltd are owned by the Andrews Children's Family Trust. The respondent is the sole trustee of the Trust. The beneficiaries are Y and X. It was not disputed that the respondent is the owner and controller of the company and the property owned by the company should be treated as the property of the respondent.
Prior to the parties’ cohabitation, the homestead was gifted to the respondent. The respondent’s grandfather was the registered owner and the property was held on trust for him. In 2004, the homestead was transferred into the joint names of the applicant and the respondent. It was to be their home. It was agreed that the applicant pay for her one half share of the property by taking responsibility for the mortgage which was registered against the property in the sum of $110,000. Stamp duty was paid on the transfer at a sale price of $220,000.00. The property is now worth $475,000.00.
(omitted) business and (omitted) business are sole trader entities through which the farm operates. In 2006, the respondent became the sole owner/operator of (omitted) business. Traditionally it has farmed the land owned by (omitted) Pty Ltd, as well as other farms which were leased, to run (omitted). In the last 25 years cropping, predominately (omitted) farming, has been undertaken.
(omitted) business was set up as a partnership between the respondent and his father. (omitted) Pty Ltd lent the partnership $80,000.00 to start it. Since then it has financed itself from income generated by business enterprises, such as contracting services and equipment to other farmers.
There were several values of property in dispute, such as the savings of the applicant, value of plant and equipment and value of livestock and stock.
The applicant gave evidence that her savings amounted to the sum of $200.00. This was not challenged by the respondent.
During his closing address, Counsel for the applicant conceded that the value for plant and equipment was $603,800.00.
In respect of livestock and stock, the applicant contended that it was worth $724,795.00, as opposed to the respondent’s value of $120,440.00. The applicant derived the value from the respondent’s affidavit, when the respondent said the current stock was worth $501,000.00 and the current livestock was worth $223,795.00. The evidence was that the (omitted) crops failed, so that the expected sale proceeds did not eventuate.
The respondent gave evidence that he purchased livestock with the original loan from (omitted) in the sum of $246,000.00 in February 2012. He used the entire funds to purchase livestock. He has sold most of the livestock to satisfy the debt. He had 1,240 (omitted) left, worth $90.00 each and 40 (omitted) worth a total of $10,000.00, a total of $121,600.00. His evidence was that this is the only livestock he had, and which he would sell. I accept the respondent’s evidence about the livestock.
Upon relisting this matter to hear Counsel’s submissions about whether I should adopt an asset by asset approach rather than a global approach to contributions, and about whether there should be an adjournment of the proceedings, the parties tendered by consent an updated schedule of assets and liabilities.[16]
[16] See exhibit 1, annexure 1.
It was agreed that the livestock has been sold and its value is $5,000.00. Plant and equipment has been sold and its value is $541,800.00.
I also asked the parties for submissions about whether the (omitted) crop is “property” under s.4 of the Act, which could be divided. Neither party sought an order about the (omitted) crop.
The respondent’s evidence was that there is five hectares of (omitted) in the ground at (omitted). It was planted in 2012 and it will be harvested in January 2014. The respondent said it was currently not worth anything. It may be worth $150,000.00 when harvested. There is a liability of $36,139.83 to (omitted) Finance in respect of the equipment purchased to produce the (omitted) crop.
Counsel for the respondent said that that the (omitted) crop is property which can be divided between the parties. He submitted that the net proceeds of sale of the crop, after payment of the equipment debt to (omitted) Finance of $36,139.83 and other expenses incurred for production of it, can be divided.
Counsel for the applicant did not make any submission about whether the crop is property. He submitted that if the liabilities are taken into account by the Court and the property is not ordered to be sold, the gross sale proceeds of the crop, less the (omitted) Finance equipment debt should be divided between the parties.
Neither Counsel referred to any case authorities and their submissions were not helpful.
Property is defined in s.4 (1) of the Act as follows:
(b) in relation to the parties to a de facto relationship or either of them--means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.
In Duff & Duff[17] the Full Court of the Family Court held that the definition in s.4(1)(a) of the Act comprehends property both real and personal, corporeal and incorporeal. It is “indicative and descriptive of every possible interest which the party can have.”[18] Property includes such things as choses in action, shares, partnership interests as well as land and personal chattels.
[17] 1997( FLC) 90-217.
[18] Ibid at para.76,133.
At common law, vested and contingent interests are recognised as property. However, the Family Court has been reluctant to regard contingent interests as property because of the difficulty of giving a value to such interests.[19]
[19] Anthony Dickey, Family Law (5th ed, 2007) at page 485.
In Crapp & Crapp (no 2)[20] Fogarty J stated:
An order can only be made…under s.79 where a party has a present or future interest in a particular item of property. Clearly where a party has a present interest no difficulties arise, and by “future interest” in above sense, I take it to mean a situation where a party has an established interest in an item of property but the date of receipt is postponed to some future time. That is different from the case where a party may become entitled to an interest in property in the future, provided that certain events occur and, all that certain disqualifying events do not occur in the meantime…
[20] 1979( FLC) 90-615.
The (omitted) crop currently does not have any value. It may never come to fruition by reason of the failure of the crop. I consider that title to the crop is not capable of immediate division or transfer pursuant to s.90SM of the Act. I therefore shall not make an order affecting it. Nevertheless, it potentially may have some value. I consider that the (omitted) crop should be treated as and taken into account as a financial resource under s.90SF(3).
Liabilities
The applicant disputed the existence of the two liabilities to (omitted). The respondent gave evidence about the liabilities. He produced an unsigned lease, emails and minutes of a meeting to determine the debt owed by the respondent to (omitted), which satisfied me that the liabilities were incurred by the respondent.[21] I consider that they were business debts reasonably incurred for the purpose of producing income and should be taken into account.
[21] Exhibit F2.
The applicant disputed that the liabilities of (omitted) business and (omitted) business were secured liabilities. Upon relisting the matter, Counsel for the applicant indicated that the applicant no longer disputed that they are secured liabilities. It was agreed that the (omitted) business liability has been reduced to $162,180.00, as a result of the sale of plant and equipment. The (omitted) Finance liability has also been reduced to $49,000.00.
The evidence was that after separation, the applicant was removed as guarantor for the (omitted) Bank loans and the equipment purchase loans.
The existing property and liabilities are as follows:
Property
Property B (A + R) $475,000.00
(omitted) Pty Ltd (R)
-Real estate $235,000.00
-(omitted) $25,000.00
-(omitted) $12,000.00
Respondent’s Bank $7,010.00
Applicant’s Bank $200.00
Jetski (R)$5,000.00
Debtors (R)$11,250.00
Livestock (R) $5,000.00
Plant and Equipment (R) $541,800.00
Applicant’s car $1,800.00
Applicant's (omitted) Fund $44,825.00
Total $1,363,885.00
Secured Liabilities
(omitted) Bank (A + R) $395,400.00
(omitted) Bank (1) (R) $109,000.00
(omitted) Bank (2) (R) $75,100.00
(omitted) Equipment (R) $162,180.00
(omitted) Equipment (R) $93,753.00
Subtotal $835,433.00
Unsecured liabilities (R)
(omitted) Bank Overdraft $48,597.00
(omitted) Bank Visa $35,678.00
(omitted) Bank Visa $35,175.00
(omitted) Credit Line $9,935.00
(omitted)$60,050.00
(omitted) Finance $49,000.00
(omitted) – (Bank) $10,030.00
(omitted)$95,670.00
(omitted)$120,375.00
ATO$81,100.00
Subtotal $545,610.00
TOTAL LIABILITIES $1,381,043.00
Net position - $17,158.00
Is it just and equitable to make an order pursuant to s.90SM?
The parties were in a de facto relationship for a period of eleven years. They separated in 2011. Each of them sought orders for property division.
They are the joint legal owners of the homestead, in which they lived during their relationship until the applicant moved to live in Hobart in 2006. The respondent now lives there. The applicant cannot use that property. She sought an order for its sale and for repayment of the mortgage. She also sought an order for the sale of the other property. The respondent sought an order that the applicant transfer her interest in the property to him and that she be released from the mortgage secured over it.
I consider that it is just and equitable to make a property order.
Should the Court adopt an Asset by Asset or a Global Approach?
The usual approach in property proceedings is for the court to consider the property of the parties as an overall pool. It is open to the court to undertake the asset-by-asset approach. In Norbis & Norbis[22] the High Court held that both the global and asset-by-asset approaches are legitimate.[23]
[22] (1986) FLC 91-712.
[23] Ibid at 75,168, 75,174 and 75,178-75,179.
The difference between the asset-by-asset and global approaches was expressed by Ryan FM (as she then was) in the unreported case of DH & RM[24]:
The global approach involves the division of the parties’ assets on an overall proportion of the global view of the assets… [whereas] The asset by asset approach involves a determination of the parties’ interests in individual items of property…[25]
[24] [2004] FMCAfam 74.
[25] Ibid at 40.
During the hearing, both parties adopted a global approach. After the hearing, I requested Counsel to make submissions about whether I should adopt an asset-by-asset approach.
Counsel for the applicant submitted that the global approach should be preferred, as the parties were in a long relationship and they have acquired joint assets. In relation to the farm, the applicant’s case is that she has made important contributions. It was submitted that an asset- by- asset approach could discount the very important role the applicant has played, and will continue to play in the future in relation to Y’s care. Counsel for the respondent conceded that an asset-by-asset approach is available to the Court, but did not take the issue any further.
I accept the submission that a global approach in appropriate in the circumstances of these parties.
Should there be a separate pool for superannuation?
Each party sought that the applicant’s superannuation entitlement should be included in one pool. Each party sought an order that the applicant retain her entitlement to superannuation. Neither party sought a splitting order. I therefore consider that it is appropriate to include this entitlement in the one property pool.[26]
[26] C & C (2005) FLC 93-220.
Can the Court make a property order when the liabilities exceed the value of property?
I consider that there is power under s.79 and therefore under s.90SM to make property settlement orders in these circumstances.[27]
[27] Trustee of the Property of G Lemnos & Lemnos & Another (2009) FLC 93 – 394.
I refer to Trustee of the Property of G Lemnos & Lemnos & Another[28] in which Coleman J said that “property” in s.4 of the definition of matrimonial cause is not confined to “net” property and thus, subject to s.90AE (3)(b), there is no legislative impediment to the making of property settlement orders where unsecured liabilities exceed the parties’ total equity in such property. His Honour said
there is no legislative provision which expressly or impliedly constrains the court from making orders with respect to “property.” Common sense and experience suggests there will be many cases in which alterations to parties’ interests in property will be appropriate or necessary notwithstanding that the parties have unsecured liabilities which may exceed the party’s total equity in such property.[29]
[28] Ibid.
[29] Trustee of the Property of G Lemnos & Lemnos & Another (2009) FLC 93 – 394, at para.96.
Their Honours Thackray and Ryan JJ agreed on this point.
Should the Court disregard or discount the unsecured liabilities?
This was the main issue in the proceedings.
The Court has discretion in respect of the recognition of unsecured liabilities. It is open to the Court to determine not to take into account or to discount the value of an unsecured liability, including but not limited to a liability which is vague or uncertain, if it is unlikely to be enforced, or if it was unreasonably incurred.[30]
[30] Biltoft & Biltoft (1995) FLC 92 - 614 at para.82127.
Both Counsel referred to the decision of Biltoft & Biltoft[31], in which the Full Court of the Family Court held:
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, 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 ).[32]
… 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) ).[33]
[31] Bilftoft & Biltoft (1995) FLC 92 – 614.
[32] Ibid at para.82124.
[33] Ibid at para.82125.
The Full Court continued:
Thus, although there is a general rule as set out in Prince and Prince (supra) and Rowell and Rowell (supra) , the rule is not absolute, is not prescribed by the statute and there are a number of well recognised exceptions to some of which we have already referred. 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.[34]
[34] Ibid at para.82128.
Counsel for the applicant contended that because the unsecured liabilities were incurred after separation, they should not be taken into account in the property division.
In Af Petersens & Af Petersens[35], in which Nygh J said:
normally the court will distribute amongst the parties the net value of their assets after deduction of all debts. But this is not invariably the case: the Court will not normally take account of debts incurred after the separation and on some occasions has ignored debts, although incurred during the marriage, for which it felt one of the party should bear exclusive responsibility: Antmann and Antmann (1980) FLC 90 – 908. Needless to say, a debt due does not diminish the property of the parties until it is paid or execution is levied. Nor, as has been pointed out earlier, is there anything in the decision of the High Court in Ascot Investments Pty Ltd v Harper and Harper to suggest that this Court cannot make an order dividing the assets of the parties because such a division might hamper a third party in his or her chances of recovery of a debt.[36]
[35] (1981) FLC91-095.
[36] Ibid at para.76669.
Nygh J cited Antmann & Antmann[37], in which the Full Court of the Family Court held that the action of the husband unilaterally closing the doors of the family business in a fit of pique should result in him being solely responsible for any losses accumulated as a result of deterioration in value of the stock and increase in the debts.
[37] (1980) FLC 90 – 908.
In circumstances such as those and in the circumstances referred to in Biltoft & Biltoft[38], the Court may find it just to order one party responsible for the debt. However, if a liability incurred after separation has not been incurred unreasonably or is connected with one of the parties’ assets or with the parties’ marriage, it will not usually be ignored by the court.[39]
[38] (1995) FLC 92 – 614.
[39] Anthony Dickey, Family Law (5th ed, 2007) , at page 530.
I turn to consider the evidence about each of the unsecured liabilities.
(omitted) Bank Overdraft $48,597.00
The respondent said that the overdraft facility has been in place for around five years. It is used for day-to-day expenses. Payment in full must be received by the end of February each year. There was no evidence that it was unreasonably incurred.
(omitted) Bank Visa $35,678.00
This liability is in the name of the respondent. He said that it is used for purchasing items for both (omitted) business and (omitted) business. The balance sheets of those entities note that. The respondent said that he has had this facility for a long time. He took a cash advance last year when he was short of cash. He will pay the debt off in full this year and then redraw it. There was no evidence that it was incurred unreasonably.
(omitted) Bank Visa $35,175.00
This liability is in the name of the respondent. He said that it is used for purchasing items for both (omitted) business and (omitted) business. The balance sheets of those entities note that. The respondent said that he has only had this facility this year and it was obtained in the same scenario as the (omitted) Bank Visa. During cross-examination, the respondent said that he paid for most of the ten day holiday to (omitted) from his personal account in December 2012, when he believed that the (omitted) crop proceeds would be more than $1,000,000.00. He paid for the accommodation when he was in (omitted) with this visa card, as he did not have the funds. The respondent arranged the holiday to take X when he believed that the (omitted) crop would be successful. There was no evidence of how much was expended on the accommodation. I consider that it was not unreasonable for the respondent to incur the accommodation costs for a short holiday in these circumstances. I do not intend to disregard or discount the liability.
(omitted) credit line $9,935.00
The respondent said that this is an emergency credit card which he does not usually use. He has used it in the last several months to pay high Aurora bills. His evidence was that he has 10 Aurora connections on leased properties, the home and (omitted). He has had the card for three or four years. There was no evidence that it was unreasonably incurred.
(omitted) $60,050.00
This facility was set up for trading stock, to purchase and sell (omitted) and obtain profit from crops. The respondent pays the debt once every 12 months. He has had this facility for many years and he has used it every year since 2006. Payment was due by 28 February 2013. There was no evidence that it was incurred unreasonably.
(omitted) Finance $74,530.00, reduced to $49,000.00
The respondent obtained the facility four years ago. The highest the debt has been was $220,000.00. In his affidavit, he said that the loan is secured against the (omitted) crops. There is a garnishee registered against one of the (omitted) crops and the first $80,000 generated by those crops is payable to (omitted) Finance. The balance was due no later than 30 April 2013.
In his oral evidence, the respondent said that he gave (omitted) Finance unencumbered plant and equipment as security, as well as one of his (omitted) contracts. He referred to a (omitted) tractor, a scraper and two pivots. He said that he had repaid $110,000.00 from the sale of the crops. He also sold a centre pivot irrigator for $45,000.00, which was paid to (omitted) Finance. The respondent has reduced the amount of the liability to the sum of $49,000.00. I consider that it was not incurred unreasonably.
(omitted) Bank $10,030.00
The respondent said that he has only used this facility in March this year. He has used it mainly for Aurora accounts on leased properties. I consider that it was not incurred unreasonably.
(omitted) $55,500.00 and rent $81,600.00, both reduced to nil
I have indicated that I am satisfied that these liabilities have been incurred by the respondent. I consider that they were reasonably incurred for the business.
The respondent said that the $55,500.00 was the balance outstanding of a loan obtained for the purchase of (omitted). The loan was obtained in 2012 for $246,000.00. He has reduced the loan by proceeds from the sale of (omitted). At the hearing he said that he had $120,000 worth of livestock still to sell. He has 1,240 (omitted) at $90.00 each and 40 (omitted) amounting to a value of $10,000.00 to sell.
The sum of $81,600.00 was owed to Mr J for rental of land, interest and agistment of stock.
The respondent’s evidence was that he was confident that he would repay the majority of the funds to Mr J, within a range of $10,000.00-$15,000.00, from the sale of livestock.
Upon the relisting of the matter, the updated schedule of assets and liabilities indicated that the (omitted) liabilities have been repaid with sale proceeds of livestock.
Counsel for the applicant submitted that because the (omitted) liabilities were disputed by the applicant, and the property value has been reduced by payment of them, I should take them into account pursuant to s.90SM rather than add them back. I do not accept that submission, as I consider that these liabilities were reasonably incurred.
(omitted) $95,670.00
The respondent has had the facility in place for years and obtains a loan at the commencement of growing the crops and repays it after harvest. This debt arose from the purchase of chemicals related to the (omitted) crops. He negotiates with (omitted) about repayment and has had discussions due to the poor crop. He said that the debt has been “put at bay till 30 June.” The respondent has signed a personal guarantee for the loan. There is no evidence that it was incurred unreasonably.
(omitted) $120,375.00
This debt relates to the purchase of fertiliser to use when the (omitted) are sown and during their growth. It has to be repaid by September 2013. The respondent has signed a personal guarantee for the loan. There was no evidence that it was incurred unreasonably.
ATO $81,100.00
The respondent gave evidence that the liability is mainly GST and PAYG tax, incurred recently. The evidence was that the respondent received the sum of $306,000.00 for (omitted) crop sales in January 2013, which was used to pay debts. The sum of $30,000.00 was GST, and related to (omitted) sales. (omitted) business and (omitted) business incur GST every quarter. (omitted) business has a repayment arrangement with the ATO of $1,500.00 per month.
The GST has been incurred as a result of the sale of the (omitted) crop. The PAYG tax was incurred because of the operation of the business. I consider that these liabilities should not be disregarded or discounted.
Conclusion about unsecured liabilities
I am satisfied about the existence and enforceability of all the unsecured liabilities. I do not consider that any of the liabilities have been incurred deliberately or in reckless disregard by the respondent of the applicant’s entitlement under s.90SM of the Act.
I consider that the unsecured liabilities, including those which were incurred after separation should not be discounted or disregarded. I am not persuaded that they were liabilities incurred unreasonably.
It was also contended that the unsecured creditors should not be given priority to the applicant’s entitlement. Counsel for the applicant relied on the argument of the learned authors of CCH under the heading Debt and Bankruptcy,
that it is hard to see how the interests of creditors will not be subsumed to the needs of children and spouses in those cases where it is not possible to reasonably meet those needs in some other way.[40]
[40] CCH Commentary Australian Family Law and Practice Commentary,at para.40-025.
It is argued that “if the legislature had intended that creditors’ interests have any priority, the legislature would have said so.” On perusal of this cited discussion, it is clear that it is an extensive discussion about s.75(2)(ha) of the Act in relation to bankruptcy and whether creditors should be given priority to the interests of the non-bankrupt spouse. The argument was not developed further and no case authorities were referred to. I did not find it helpful in respect of this matter. I have found that the unsecured liabilities should not be disregarded between the parties in the property division in accordance with the principles established by the Full Court. There is no rule of priority as between a creditor and a spouse. The rights of a creditor must not be ignored, but must be balanced against the rights of the spouse.[41]
[41] Prince & Prince (1984) FLC 91-501.
What Order should be made pursuant to s.90SM(4)?
The liabilities exceed the value of the property. Notwithstanding this, in considering what order to make which is just and equitable, I am required to consider the evidence about the contributions of the parties and make findings about them.
Contributions
At the commencement of the relationship the applicant worked in the (omitted). In 2000 she set up her own (business omitted) in (omitted). She earned an income during each year of the party’s relationship.[42] She also accumulated her superannuation entitlement.
[42] Paragraph 13 Applicant’s affidavit filed 9 January 2013.
She contributed her income from her business and employment as a (omitted). She made financial contributions to the mortgage and line of credit secured on the homestead. She paid the mortgage secured over the homestead from 2004 until November 2011. The mortgage reduced from $110,000.00 to approximately $80,000.00.
The applicant contributed her income to pay general household expenses.
The applicant financially contributed jointly with the respondent for the renovations on the home through the line of credit secured over the home.
The applicant contributed by assisting with renovations, maintenance and gardening on the homestead.
In respect of (omitted) Pty Ltd and the business, the applicant made indirect contributions. The applicant said that the respondent’s business had been under significant financial stress during the six years until separation. She assisted him by enabling him to borrow money to purchase assets to run his business and plant/harvest crops. She agreed to provide him with her financial details and signed forms relating to extension of loans and as guarantor. She said that she did this on the basis of the respondent’s promise that he would prioritise buying a home in Hobart for her and the children when the next crops were harvested. The respondent did not dispute this. She entered into guarantees in respect of the plant and equipment owned by the business.
The evidence indicated that the businesses have been struggling financially for many years. The applicant said that she made the decision in August 2011 to leave the respondent. One of the reasons was that she was guarantor of many of the respondent’s loans. She said, “the risk of me losing more than I have, and the impact that would have on the lives of our children, due to Mr Andrews’ business operations, is still a significant stress in my life.”[43] She did not believe that the respondent would have been able to stay in business had it not been for her financial support. She said that during the six years that she lived with the children in Hobart, she supported the respondent financially to stay on the farm and keep the business running. After separation, the applicant was removed as guarantor for the (omitted) Bank loans and the equipment purchase loans.
[43] Page 22 of the Applicant’s affidavit filed 9 January 2013.
The respondent said that if the funds were obtained to use in the day-to-day operations of (omitted) business, the applicant was not responsible for repayments. Consequently she never made repayments into the line of credit for that purpose. (omitted) business paid those funds. The applicant conceded that she did not make direct payments to the loans in respect of the farming enterprises.
The applicant conceded that she did not contribute financially to the farm liabilities. She was a support to the respondent, by discussing the farm businesses with him.
The applicant was involved in the joint enterprise of (omitted) Enterprises and Andrews Enterprises. She contributed around $15,000.00 to purchase a boat, which was subsequently sold to put into Andrews Enterprises. She contributed funds towards the purchase of a pivot, water rights and other costs. During cross-examination, she said that she contributed $3,000.00.
The applicant continued to work after X’s birth in 2004. Soon after Y’s birth, Y was diagnosed with (omitted), a rare genetic condition. This results in severe intellectual and physical disability with uncontrollable and life-threatening seizures. Y had her first seizure at eight weeks of age.
The applicant tried to care for Y and X from (omitted). She moved to Hobart with the children in early 2007, due to the requirement of Y to attend doctors, therapists, specialists and to be close to the hospital. For a period of four years prior to separation, she cared for the children in Hobart.
This enabled the applicant to continue to work and to ensure that Y had access to health care and to ensure that X also had a lifestyle of quality. She moved into rental accommodation and has lived in various rental houses with the children. The respondent continued to operate the farm.
The evidence indicates that Y requires 24 hour care. The applicant annexed a letter from Dr D, Y’s paediatrician. The respondent did not object to or challenge his summary of Y’s medical status and future care needs. He also did not contest the applicant’s evidence about Y’s needs and care. To his credit, he said that the applicant’s efforts to help Y, after she was diagnosed with the genetic condition and was told she was dying, were amazing. He said, “I have no doubt they were a contributor to Y’s improvement.”
Dr D indicated that Y may die from seizures at any time but many people with her condition live long lives. He said that Y’s general health is very good due to the excellent care the applicant provides so it is possible that Y will outlive the applicant. The applicant and Y spent time in and out of hospital. The applicant continued to work when she could. On those days the children were looked after by a family day carer.
Notwithstanding these difficulties, the applicant continued to contribute financially by working and earning an income for the benefit of the family.[44]
[44] Paragraph 13 Applicant’s affidavit filed 9 January 2013.
The applicant has made contributions to the welfare of the family. She has enabled the respondent to continue working on the farm by caring for the children.
She has continued post-separation to make those contributions. She said that since late January 2012, Y’s health deteriorated significantly with her having up to 30 seizures a day. Due to her care load in relation to Y and X and the stress of managing Y’s illness, she was admitted to hospital suffering from a virus and exhaustion.
The respondent contended that his initial contributions were significant. In Kessey & Kessey[45] the Full Court noted:
In many — indeed probably in most – property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of such contributions – all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party[46].
[45] (1994) FLC 92-495.
[46] Ibid at para.81151.
In Pierce & Pierce[47] the Full Court considered how the assets brought into a marriage by the parties to that marriage are to be treated. Their Honours stated:
In our opinion, it is not so much an erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to use made by the parties of that contribution. In the present case that use was a substantial contribution of the purchase of the matrimonial home.[48]
[47] (1999) FLC 92-844.
[48] Ibid at para.28.
It is a well accepted principle that, in property cases, the Court is not required to assess the contribution of parties with mathematical precision.[49] In respect of initial contributions and other contributions, in the decision of Clives & Clives[50], the Full Court said:
We accept that the task to be undertaken by a trial judge in assessing weight to be attached to initial contributions, and other contributions, is not always an easy one and not discharged by a strict accounting exercise…[51]
[49] Norbis & Norbis (1986) FLC 91-712 at para.75,167; Brandt v Brandt (1997) FLC 92-578 at para.84,343; Quinn and Quinn (1979) FLC 90-677 at para.78,615.
[50] (2008) FLC 93-385.
[51]Ibid at para.44.
It is not necessary for the Court to arrive at a precise value of those contributions.[52] The reason for this is that many of the matters which the Court is required to take into account pursuant to s.79(4), are not at all capable of precise calculation, even if such calculation were desired.[53]
[52] Kessey & Kessey (1994) FLC 92-495 at para.81,150-81,151.
[53] Anthony Dickey, Family Law (5th ed, 2007) 532. Zyk & Zyk (1995) FLC 92-644, at para.82, 509-82, 510.
The Court is required to consider the competing claims and relevant considerations broadly and fairly, when making orders that are just and equitable.[54]
[54] Ibid.
The respondent believed that the homestead of 30 hectares was worth between $350,000.00 and $400,000.00 at cohabitation, although he agreed that the sum of $220,000.00 was the transfer price of the property to him and the applicant in 2004. There was no valuation evidence of the initial equity in the properties or evidence of increase in values. There was no probate evidence of what the respondent’s father’s estate was worth in respect of the respondent’s inheritance of (omitted) Pty Ltd.
The respondent paid for the improvements of the homestead before cohabitation. He said that, before he met the applicant he had replaced the kitchen and he believed that cost $30,000.00. Jointly with the applicant during cohabitation he contributed towards the cost of renovations on the homestead.
The respondent made financial contributions by earning income from the farm businesses. He has made non-financial contributions by working on the farm and managing the businesses. He was involved in numerous farming activities including (omitted)..
Since separation he has continued to make these contributions. If the (omitted) crop had not failed, it is likely that the liabilities would have been substantially reduced. He has made the mortgage payments in respect of the homestead since November 2011.
The respondent said that the applicant did not make any direct financial contributions towards the farm, and she made minimal non-financial contributions. She was never involved with the physical running/operation of the farm. He said that she was working in her own job during the week, and no work was done on the farm at weekends. He was solely responsible for decisions relating to the farm.
During cross-examination, he conceded that they had discussions about the businesses at night. He agreed that they discussed (omitted) crops when he was trying to negotiate payments from (omitted), and she had an active role in meetings.
I accept the respondent's evidence in respect to the payment of debts relating to the business and I accept his evidence in respect of the physical running of the farm.
There was little evidence about the respondent’s parenting contributions. In 2009 he cared for the children when the applicant went overseas to a conference. He cared for the children at times when the applicant travelled for her (omitted) business. In 2012, he cared for Y over a 10 day period when the applicant and X went for holiday in (omitted).
Since mid-2012 the parties agreed for the children to spend time with the respondent each alternate weekend.
Both parties contributed to the children’s expenses during the relationship. After separation, the amounts paid by the respondent varied. Until February 2013, he contributed $1,250.00 per month. After a child support assessment was made, he contributed $49.60 per week.
Conclusion about contributions
I place weight upon the respondent’s contribution of the homestead, (omitted) Pty Ltd and the farm businesses.
Both parties financially contributed to the improvements of the homestead. Both parties made non-financial contributions to the homestead. The applicant made the mortgage payments secured on the homestead during the relationship.
Both parties contributed income to household expenses during the relationship.
I place weight upon the applicant’s significant parenting contributions, which were greater than those of the respondent. She primarily cared for the children during the relationship and after separation.
The respondent has made greater financial and non-financial contributions to (omitted) Pty Ltd and the farm businesses during the relationship and post-separation.
In weighing up the respective contributions, it is usual to determine the property on the basis of percentage. However, there is no net property upon which to make a percentage adjustment. It is relevant in this matter to consider what each party will receive. If there was property upon which an adjustment could be made, I consider that the contributions should be assessed at 57%/43% in favour of the respondent.
Section 90SF (3)
In respect of s.90SF (3) factors, Counsel for the applicant submitted that there should be a credit of 20% in the applicant’s favour, due to the ongoing costs for Y and due to both children being in her primary care.
Counsel for the respondent did not make a submission about any credit to be given for these factors. It was conceded that the children will spend the majority of time with the applicant in the future and that brings with it significant difficulties.
The respondent’s position was that he will retain the real estate and all the farm assets and he will assume responsibility for all the debts. The applicant will retain her superannuation and motor vehicle. It was submitted that although this will not provide the applicant with a home or cash, there are no assets from which a payment could be made to the applicant.
The applicant is aged 40 and the respondent is aged 45. The applicant suffers from lower back pain and requires physiotherapy.
The respondent is in good health.
The applicant’s income from her business as a (omitted) varies each year. In 2012, she earned approximately $138,000.00. She estimated that she is currently earning $1,500.00 per week. She also receives a carer’s allowance of $55.00 per week. She has weekly expenditure of $2,284.00 per week.
The respondent currently earns income from his businesses of $36,400.00 per annum. He has expenses of $525.00 per week. His income varies with the success of his farming enterprises. He estimated his income for 2011-2012 was $208,000.00, although this did not eventuate.
The respondent has a financial resource of a (omitted) crop, which may be worth $150,000.00 or “a lot less or a lot more” when harvested.
The applicant will continue to be primarily responsible for the care and welfare of X and Y. She wants to purchase her own accommodation to house the children.
Dr D detailed that even in adulthood Y will require extensive care and support.
Dr D wrote that when Y is at school there needs to be a carer available to assist the school at short notice or take Y home if seizures become too difficult for management at school. Y will need to have ongoing frequent medical appointments, including appointments in Melbourne for specialist care. To provide for Y’s minimal needs may require at least $900.00 per week.
Y will never be able to live independently or work in any capacity and due to the complexity and severity of her seizures; it is likely that she will live with the applicant until she is no longer physically able to care for her.
The applicant has a new partner. Because of their respective care needs for their own children they maintain separate households.
The respondent has a new partner, with whom he lives when he is in Hobart. He pays her $100.00 per week to assist her with rent. She does not assist the respondent with his expenses.
The applicant has superannuation which she will not be able to access for many years. The respondent does not have superannuation.
The standard of living which the applicant had during the relationship, with a home to live in with her children, is unlikely to be achieved because of the state of the property pool with considerable liabilities.
The respondent’s intention is to farm out the debts. However, he said that it is a long way off for him to achieve a net asset position.
The nature of the farming business is reflected by the (omitted) crop over the last two years. The respondent had expected to receive $1.2 million from his harvested (omitted) crop at Christmas 2012. Because the crop failed, he received $513,000.00. The 2011 season was successful and he received $755,000.00. If the crop had been successful this year, it is likely that there would have been funds to pay the liabilities and property to divide.
The respondent agreed that in May 2012, he was in a net positive position, and said that (omitted) business was in credit, but (omitted) business was not. He hopes to be in a net positive position in 2014.
He said that this is not the first time he has been in a hard spot financially and he has always managed to get out of it in the past. In 2010, he grew (omitted) with (business omitted) and was left $200,000.00 out of pocket. He pulled himself out of that and he believes he can pull himself out of the current situation.
I consider that the proposed order will not have an effect on the ability of the creditors to recover the debts. The respondent said that usually the (omitted) Bank cards, the (omitted) Credit line, the (omitted) card, the (omitted) Finance and the (omitted) debts are cleared. The (omitted), (omitted) and ATO debts are usually cleared yearly. The (omitted) Bank loan goes up and down. Last year it went into credit. The (omitted) debt has to be paid so that he can use the facility next year. He intends to pay the credit lines as soon as he can. The credit lines will be the first debts to reduce after he pays the debts which he is under pressure to pay, such as (omitted), (omitted) and (omitted). He has a bit more time to pay the (omitted) debt. In respect of his tax, he has a repayment program of $1,500.00 per month with one debt.
The respondent said that the (omitted) and (omitted) debts are the debts of most concern. He has spoken with (omitted) who understand his situation. (omitted) Finance has security over machinery and the debt can be satisfied by selling machinery. The (omitted) debt is not due yet. He intends to pay it off over a period of time. He said he will have half paid off in March 2014 when the (omitted) crop is harvested.
He will scale down his operation. He does not employ anyone anymore. He will concentrate on (omitted) to a greater extent than (omitted).
He said that he only wants to keep the (omitted) equipment and one tractor, which is unencumbered and which he will refinance. He said that he has never defaulted on a loan and has a good credit rating. He wants to continue to pay off the loans over the next few years.
In respect of plant and equipment leases, in normal circumstances the respondent pays them out when the terms require payment. He usually retains the debt for its full term.
Counsel for the applicant submitted that the respondent deliberately or recklessly reduced the value of assets available for distribution. He submitted that the respondent did not properly water the (omitted) crop this year and he purchased and sold equipment at a loss. He submitted that the timing of the failed (omitted) crop weeks before the trial was unfortunate, if not suspicious.
A Court may take into account any destruction or unreasonable diminution or dissipation of assets caused by a party. The circumstances in which the Court may take this into account were outlined by Baker J in matrimonial property proceedings in Kowaliw & Kowaliw[55] as follows:
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.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec. 75(2)(o) to applications for settlement of property instituted under the provisions of sec. 79.[56]
[55] (1981) FLC 91-902.
[56] Ibid at para.76,644.
The Full Court in Browne & Green[57] explained the decision in Kowaliw,[58] saying that the “principles” stated by Baker J did not constitute any form of fixed code, rather they were guidelines for use in the exercise of the discretionary jurisdiction conferred by s.79. Nonetheless these guidelines have been accepted since the time that they were enunciated.[59] The Full Court went on to say that there should be good and substantial reasons for departing from the principle that where there are economic losses incurred in the marriage, those losses should be shared, absent any negligence, recklessness or deliberate dissipation of assets by one party.[60]
[57] (1999) FLC 92-873.
[58] Above n 55.
[59] Browne & Green, above n55, at para.86,361.
[60] Ibid.
A distinction must be drawn between the deliberate destruction, diminution or dissipation of assets, and the diminishing of assets in circumstances which do not involve blameworthy conduct by a party.
To support a finding that conduct is sufficiently reckless, negligent or wanton to have reduced or minimised the value of the assets in accordance with the decision of Kowaliw & Kowaliw[61], there should be cogent evidence. In D & D[62] Carmody J discussed the degree of satisfaction necessary in fact-finding and said:
What this means in a practical sense is the more serious the allegation, the more cogent the evidence required to overcome the unlikelihood of what is alleged and thus to prove it.[63]
[61] (1981) FLC 91-902.
[62] [2005] FamCA 356.
[63] Ibid at para 146.
The respondent explained that the (omitted) crop failed because several of the paddocks he leased from (omitted) were wet at sowing time and then there was no rain and the crops were sown late. The other crops looked good but the heat shrivelled them up. He said that he irrigated where he could get access to water. The paddocks available to lease were not in reach of water. He made an executive decision with his workmen as to whether to put in irrigators, but this would have flattened much of the crop and the benefits did not outweigh the disadvantages. If he had done so, he may have improved the yield by $8,000.00 in total. He denied that he could have performed better with the crop management.
There is no evidence to persuade me that respondent embarked upon a course of conduct designed to reduce or minimise the effective value or worth of the (omitted) crop or plant and equipment. I am not persuaded that he has acted recklessly, negligently or wantonly which has had the effect of reducing the value of assets, in accordance with the principles in Kowaliw[64].
[64] (1981) FLC 91-902.
Counsel for the respondent submitted that the losses should be shared between the parties in these circumstances. I accept this submission. It was the applicant’s position that she wanted to share the profits of the (omitted) crop. It is extremely unfortunate that the (omitted) crop failed, but the losses should be shared between the parties.
Counsel for the applicant submitted that the justice of the matter requires the Court to take into account that the applicant will not be able to purchase a house for her and the children if she does not receive a cash adjustment. Counsel for the respondent submitted that the Court should take into account that although the applicant will not receive a lump sum, she will be free of debt.
The respondent does not want to sell the farm. He intends to continue farming, as that is all he has done and is what he wishes to do in the future. If it is sold he will need to obtain employment. His evidence was that for twenty years he was a (occupation omitted) for (omitted) companies until 2009. He said that potentially he could do that, but was not sure whether he could obtain employment.
Having regard to all the factors, I consider that if there was property to make an adjustment, they favour the applicant to the extent of 5%.
Conclusion about what order to make
Counsel for the applicant submitted that a sale of all property is necessary because that is the only way money can come from the pool. It was submitted that a sale is necessary because the applicant will be paid in priority to the unsecured creditors. Given my findings, if the property was to be sold, all the liabilities will be paid from the sale proceeds before the parties are paid any funds.
If the property is ordered to be sold, the respondent believes that there will be a significant shortfall of funds, and the gap between the liabilities and the property will increase. There will be sale costs and there is no guarantee that the sale prices will equate to the valuations of the property.
The sale of the farming property and businesses, which produce income, will result in sale costs and there is no guarantee that sales will be achieved at the valued figures. The sale of all the property will result in the respondent not having land, other than leased land, to produce an income, to reduce debt and to pay child support.
I consider that the sale of the farming property is not warranted unless the order I make cannot be complied with.
The respondent’s proposal for the applicant to retain her superannuation, her car and her savings, and be released from the mortgage secured over the homestead will result in the applicant not having any liabilities. I consider that this proposal is the just and equitable order to make in the circumstances.
The respondent can sell unencumbered plant and equipment to reduce the debt level. The (omitted) crop may or may not reduce the debt further. In order to produce income, the respondent is likely to incur further debt to produce the next crop.
The respondent will retain the farming property and businesses and assume responsibility for all the liabilities. If he cannot secure the release of the applicant from the (omitted) Bank mortgage secured on the homestead within 120 days, I will order its sale. The sale proceeds will pay the (omitted) Bank mortgage and reduce some of the other outstanding liabilities of the businesses.
Is the order just and equitable?
The effect of the orders I will make is as follows:
The applicant will retain the following:
Superannuation $44,825.00
Car $1,800.00
Savings $200.00
Total $46,825.00
The respondent will retain the following:
Savings $7,010.00
Jet ski $5,000.00
Property B $475,000.00
(omitted) Pty Ltd
-real estate $235,000.00
-(omitted) water $25,000.00
-(omitted) water $12,000.00
debtors $11,250.00
livestock $5,000.00
plant and equipment $541,800.00
Total $1,317,060.00
Liabilities
(omitted) Super $395,400.00
(omitted) Bank $109,000.00
(omitted) Bank $75,100.00
(omitted) Equipment $162,180.00
(omitted) Equipment $93,753.00
(omitted) Bank Overdraft $48,597.00
(omitted) Bank Visa $35,678.00
(omitted) Bank Visa $35,175.00
(omitted) Credit Line $9,935.00
(omitted) Finance $60,050.00
(omitted) Finance $49,000.00
(omitted) – (Bank) $10,030.00
(omitted) Finance $95,670.00
(omitted) Finance $120,375.00
ATO $81,100.00
Total Liabilities $1,381,043.00
Net -$63,983.00
In the circumstances of this difficult matter, I consider that this result is just and equitable.
Child Support
The respondent is assessed to pay child support for the two children at the annual rate of $2,588.00 and the monthly rate of $215.67. The assessment period is 17 January 2013 to 16 April 2014.[65]
[65] Exhibit 2.
Section 117 sets out the matters of which the court must be satisfied before making a departure order. The court must satisfy itself:
“(i) Whether one or more of the grounds for departure in s.117(2) is established,
(ii) Whether it is ‘just and equitable’ within the meaning of s.117(4) to make a particular order; and
(iii) Whether it is otherwise ‘proper’ within the meaning of s.117(5) to make a particular order.”
Before making a determination to depart from a child support assessment, a “special circumstance” must be established. In Gyselman & Gyselman[66] the Full Court referring to the term “special circumstance” said:
Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases[67]
[66] (1982) FLC 92-279 .
[67] Ibid at para.29.
The applicant is relying on the special circumstances set out in s.117(2)(b)(ia) which provides:
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(ia) because of the special needs of the child; or
The parties agreed that the cost of caring for Y, including medications, food required for her special diet, nappies, equipment and other necessities, and the cost of school fees and other child related expenses are significant and establish special circumstances to depart from the administrative assessment. It was not disputed that the level of care required for Y is very expensive and her minimal needs may require $900.00 per week for her natural life.
I am of the view that Y’s special needs amount to special circumstances and are a ground for departure from the administrative assessment of child support.
The parties’ financial positions and expenses were not challenged.
The applicant has income from her business of $1,500.00 per week, which varies, and she receives $55.00 per week carer’s allowance, a total of $1,555.00 per week. Her weekly expenditure is $2,284.00 per week, which includes expenses of $1,537.00 per week for the children.
The respondent has a weekly income of $700.00 from (omitted) business and (omitted) business and has weekly expenses of $525.00.
I have regard to the relevant matters set out in s.117(4) of the Assessment Act. In balancing the hardship to the parties and having regard to the income property and financial resources of the parties and their commitments, there will be greater hardship to the applicant if an order is not made, than to the respondent if one is made. He had the capacity to pay the sum of $1,500.00 per month prior to the assessment being made. I consider he will continue to have that capacity.
As I have said, the applicant receives a carer’s allowance on Centrelink of $55.00 per week. I consider that it is proper to make the order.
I am satisfied that the applicant has established a ground for departure for the current child support period.
There is no administrative assessment for the child support period from 17 April 2014.
Counsel for the applicant referred to the decision of Dwyer & McGuire[68] in which Lindenmayer J held that the structure of the Act is such that once a valid application for departure has been made, it throws open for consideration by the Court the question of departure from the administrative assessment provisions of the Act not only in respect of any current or past child support years but also in respect of any future years.[69] This decision was followed by Federal Magistrate Ryan (as she then was) in C & G[70].
[68] (1993) FLC 92-420.
[69] Ibid, at page 80,316.
[70] (2002) FMCAfam 361.
The respondent agreed to set the child support amount payable by him at $15,000.00 per annum for both children for a period of four years. I consider that Y’s special needs will continue and amount to special circumstances that justify a departure for the periods after 16 April 2014. I consider that is just and equitable and otherwise proper to make that order.
Section 118(1)(a) provides that the Court can make an order varying the annual rate of child support payable by a parent. I will therefore vary the annual rate of child support for the two children payable by the respondent to $15,000.00 per annum.
Lump sum or substitution order?
The applicant sought that the child support be paid as a lump sum pursuant to Section 124(1) of the Assessment Act. This provides that the order must be just and equitable and otherwise proper. The Court must have regard to the matters referred to in s.124(2), and in determining whether it is just and equitable and otherwise proper, the Court must have regard to the matters contained in s.117(4), (5), (6), (7) and (8).
The main issue in respect of the lump sum substitution application is for payment of $60,000.00 is whether the respondent will continue to pay child support.
However, it was conceded by Counsel for the applicant that there was no evidence that the respondent is a person who is not likely to pay child support. He conceded that the only submission he could make was that the respondent’s attitude was wanting in terms of child support. He submitted that if the farm is sold, this is the only opportunity to obtain financial support from the respondent.
It is preferable for the payment of child support to be by way of periodic payments rather than a lump sum order anticipating the long-term future. In Bendeich & Bendeich[71] Mushin J said:
The rational underlying the general approach of the Court was that the longer a lump sum order operates the greater the chance of change in circumstances necessitating a variation of that order, thereby making the order unjust. Those changed circumstances might be in relation to the liable parents, custodial parent or the children. Incomes may increase or decrease and children may change their living arrangements from one parent to another.[72]
[71] (1993) FLC 92-355.
[72] Ibid, at para.79,754.
It is necessary for the applicant to establish a need for a lump sum. The Full Court said in Prpic & Prpic[73]:
Capitalisation orders may well be appropriate where there are difficulties in enforcement or where it is proper to sever the financial link between the parties. However, as a general rule, given that payments of child support depend upon circumstances prevailing from time to time which circumstances can not be predicted with any degree of certainty, it seems to us that the provision of child support by way of lump sum should not be considered to a be a readily available alternative but one that is only exercised when there are circumstances that make it appropriate so to do.[74]
[73] (1995) FLC 92-574.
[74] Ibid at para.81,688.
The provision of child support by way of lump sum payment is not the preferred method of maintaining children. Lump sum orders are usually considered where there are difficulties in enforcement or where liable parents are asset rich and income poor[75]. This is not a matter where the respondent is asset rich and income poor. The respondent is not in a net asset rich position. He earns an income from farming and has always earned an income. He will continue to do so, whether by farming or contracting. This is also not a matter where the respondent left his employment to avoid paying any child support, such as in the case of Bolton & Bolton.[76]
[75] CCH Australian Child Support Commentary at para.17-350.
[76] (1992) FLC 92-309.
The respondent is currently paying child support in accordance with the administrative assessment of $49.70 per week. His evidence was that up until 1 February 2013 he was contributing $1,250.00 per month. He accepted that was an appropriate level of contribution and accepted that the children needed that level of support.
His evidence about why that had changed was that the applicant applied for administrative assessment of child support. He said that he was paying $1,250.00 per month, but the Child support Agency informed him that the applicant wanted him to pay through the Agency. He was told what to pay and he paid it.
During cross-examination, the respondent said that he was happy to continue to pay $1,250.00 per month. He said that he wants to support Y and he would have done so if the agreement had not been interfered with by the Child Support Agency.
The respondent has been paying monthly payments. He agreed to set the annual rate of child support at $15,000.00 per annum for four years. He agreed to pay the sum of $15,000.00 within 90 days and pay the sum of $15,000.00 in advance at the beginning of each year.
I am not persuaded that the respondent has an intention to avoid the payment of child support. I am not satisfied that he will not meet his obligations.
I am of the view that the circumstances in this case are not sufficient for me to find that it is appropriate to order a lump sum payment of $60,000.00.
I consider that it is appropriate to order payments in advance because this will assist the applicant in meeting needs for Y. The respondent has a capacity to draw on his overdraft and he has indicated that he that he can make that payment each year.
I certify that the preceding two hundred and twenty-five (225) paragraphs are a true copy of the reasons for judgment of Judge Baker.
Date: 7 November 2013
Annexure one
SCHEDULE OF ASSETS AND LIABILITIES – RESPONDENT HUSBAND
Assets
Property B 475, 000.00
(omitted) Pty Ltd
-Real estate 235, 000.00
-(omitted) 25, 000.00
-(omitted) 12, 000.00
Respondent’s Bank 7, 010.00
Applicant’s Bank 2, 000.00
Jetski 5, 000.00
Debtors 11, 250.00
Livestock – the livestock has been sold but for $5,000
worth (previously 120, 440.00) 5, 000.00
Plant and Equipment – the respondent has sold the (omitted)
Tractor for $31, 000.00 and the (omitted)- Excavator for $40, 000.00. Those two
Items were valued at $24, 000.00 and $38, 000.00 respectively. There was a corresponding
Reduction in debt of $71, 000.00 which is shown (previously 603, 800.00) 541, 800.00
Applicant’s car 1, 800.00
Applicant's (omitted) Fund 44, 825.00 TOTAL ASSETS: $1, 365, 685.00
Liabilities
(omitted) Bank 395, 400.00
(omitted) Bank (1) 109, 000.00
(omitted) Bank (2) 75, 100.00
Sub Total: $579, 500.00
*(omitted) Bank Overdraft 48, 597.00
*(omitted) Bank Visa 35, 678.00
*(omitted) Bank Visa 35, 175.00
*(omitted) Credit Line 9, 935.00
*(omitted) 60, 050.00
*(omitted) Finance the respondent has discharged some
$25, 000.00 of the (omitted) Finance debt since the hearing (formerly 74, 530.00) 49, 000.00
*(omitted) equipment (formerly $233, 180.00 less the $71, 000.00
Referred to above) 162, 180.00
*(omitted) equipment 93, 753.00
*(omitted) – ANZ 10, 030.00
*(omitted) 95, 670.00
*(omitted) 120, 375.00
*ATO 81, 100.00
(omitted) Rent + (the rent debt has been paid with funds obtained from the sale of
Livestock referred to above) (formerly 81, 600.00) Nil
(omitted) + (the rent debt has been paid with funds obtained from the sale of
Livestock referred to on page ) (formerly 55, 000.00) Nil
Sub Total: $801, 543.00
TOTAL LIABILITIES $1, 381, 043.00
Net Position -$15, 358.00
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