Cuneo & Cuneo
[2006] FamCA 158
•17 March 2006
[2006] FamCA 158
FAMILY LAW ACT 1975
FAMILY COURT OF AUSTRALIA NO. TVF 44 of 2003
AT CAIRNS
BETWEEN: Mr R CUNEO (Applicant/Husband)
AND: Mrs M CUNEO (Respondent/Wife)
AND: Mr G CUNEO (Intervenor/Son)
REASONS FOR JUDGMENT
BEFORE: JUSTICE I R COLEMAN
DATE OF HEARING: 26th – 28th days of October, 1st & 2nd days of November 2005. Written submissions received from respondent wife and intervenor son on 12 December 2005 and from applicant husband on 16 December 2005
REASONS DELIVERED: 17th day of March 2006
APPEARANCES: Mr Page of Senior Counsel with Ms Pack of Counsel (instructed by Farrellys Solicitors, PO Box 604, Cairns QLD 4870), appeared on behalf of the applicant husband
Mr Fellows of Counsel (instructed by MacDonnells Solicitors, PO Box 5046, Cairns QLD 4870), appeared on behalf of the respondent wife
Mrs Pagani of Counsel (instructed by Miller Harris Lawyers, PO Box 7655, Cairns QLD 4870), appeared on behalf of the intervenor son
CATCHWORDS:
FAMILY LAW – PROPERTY SETTLEMENT - Section 79 claim of the son or in the alternative the payment to the son of a sum specific on a quantum meruit.
FAMILY LAW – PROPERTY SETTLEMENT - "Kennon claim" - "special contribution" claim.
IT IS NOTED that publication of this judgment under the pseudonym Cuneo & Cuneo and Cuneo is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
The proceedings before the Court relate to settlement of property. Mr Cuneo (“the husband”) sought orders that the property of himself and Mrs Cuneo (“the wife”) be divided as to 60 per cent to the husband and 40 per cent to the wife.
The husband, in his originating process and the concluding submissions of his Senior Counsel, recognised the not insignificant issue of how the Court’s orders should be framed. Regardless of the outcome of the proceedings, having regard to the “complexities involved” and “financial impost upon the parties” as identified in reports of chartered accountants KPMG of 28 October 2005 and/or chartered accountant Mr B of 1 November 2005, determining the entitlements of the parties is not necessarily sufficient to dispose of the proceedings. As was submitted on behalf of the husband by his Senior Counsel, the terms of the orders by which the proceedings are finalised require careful consideration. For present purposes however, it is sufficient to identify the husband’s claim as a claim for 60 per cent of an asset pool, to which more detailed reference will, in due course, be made, which approximates $4,000,000.00. The husband sought that such outcome be achieved by any of a number of approaches, sale and division of proceeds of sale of the major assets being his preferred outcome.
The wife opposed the granting of relief in the terms of the husband’s Application and sought that, after satisfying the entitlement of the son, on any of the bases advanced on his behalf, the remaining property of the husband and wife be divided in accordance with an Amended Response filed 19 September 2005, which provided in essence that “after any division” in favour of the son, the remaining property of the husband and wife be divided as to 65 per cent to the wife and as to 35 per cent to the husband, such settlement to be achieved in the manner set out in detail in the wife’s Further Amended Response to an Application for Final Orders filed 19 September 2005. That Response relevantly provided that:
1. That the parties, in the capacity as directors of [T] Pty Ltd ACN as trustee for The [Cuneo] Family Trust, do all acts and things sign all documents necessary to cause to transfer to the wife all assets of the said trust as at the date of these Orders, including without limitation the following:
a.Lot 151 Crown Plan […] together with all improvements thereon;
b.all plant and equipment;
c.Cane assignment – Farm Number […], and any supply agreement held in respect of sugar cane farming;
d.shares in the [MCM] Company Limited; and
e.shares in [ST] Limited.
4. Upon the transfers in Clause 5, the wife will do all acts and things necessary to assign to the husband the whole of her right, title and interest and in the loan account of the wife in The [Cuneo] Family Trust.
5. Save as otherwise provided herein, the husband will indemnify and keep indemnified the wife against liabilities of The [Cuneo] Family Trust.
6. That the wife transfer to the husband her shareholding in [T] Pty Ltd.
7. That the wife resign from all offices held by her in [T] Pty Ltd.
8. That for the purpose of clause 7. above, the parties cause a meeting of the directors of [T] Pty Ltd to be convened and cause a resolution to be passed unanimously at that meeting that the Memorandum and Articles of Association (or Constitution) of that company be amended or replaced so as to allow for the lawful appointment of a single director and to permit the holding of all of the company’s issued share capital by one person.
[R and M Cuneo] Partnership
9. That the husband transfer to the wife all his right, title and interest in the capital and assets of the [R & M Cuneo] partnership (“the Partnership”), and all money standing in the books of the Partnership in the husband’s name as undrawn profits and on loan account as at the date of these Orders.
10. Upon the transfer referred to in Clause 9:
a.the wife will indemnify the husband against all debt and liabilities of the Partnership; and
b.the husband will join in signing any election, choice or notice required under the Income Tax Assessment Acts to give effect to the transfer of his interest in the Partnership.
Jointly Owned Assets
11. That the husband will do all acts and things and sign all documents necessary to transfer to the wife, or to relinquish to the wife as the case may be, all his right, title and interest in the following:
a.[Property A1] in the State of Queensland, more particularly described in certificate of title reference […] as […] together with all improvements thereupon (“the Matrimonial Home”);
b.[Property A2] in the State of Queensland, more particularly described in certificate of title reference […] as […] together with all improvements;
c.Seca seed currently stored with any third party for sale;
d.the proceeds in the sum of $70,000 from Suncorp Metway Ltd Farm Management Deposit number […] formerly held by the wife;
e.Cane assignment – Farm Number […], and any supply agreement held in respect of sugar cane farming;
f.the husband’s “G” class shares in [ST] Limited;
g.the wife’s “G” class shares in [ST] Limited;
h.the wife’s Ford Falcon motor vehicle; and
i.the jointly owned shares in the [MCM] Company Limited.
12. That the wife do all acts and things and sign all documents necessary to transfer to the husband, or to relinquish to the husband as the case may be, all her right, title and interest in the following:
a.the husband’s Peugot;
b.the proceeds in the sum of $70,000 from Suncorp Metway Ltd Farm Management Deposit number […] formerly held by the husband; and
c.the sale of proceeds of the husband’s shares formerly held in North Queensland Tobacco Growers Association.
Payments
13. That the wife make the following payments:
a.to Suncorp Metway such sum as may be required to discharge the following liabilities of [T] Pty Ltd as trustee for the [Cuneo] Family Trust:
i.Suncorp account numbers […], […], […] and […];
and thereby release all securities held by the bank in relation to such accounts, including:
ii.mortgage number […] to Queensland Industry Development Corporation in relation to the Matrimonial Home;
iii.mortgages number […], […] to Corporation of the Agriculture Bank, and […] to Queensland Industry Development Corporation in relation to the [Cuneo] Farm; and
iv.mortgages number […] and […] to Corporation of the Agricultural Bank, and […] to Queensland Industry Development Corporation in relation to the Trust Farm; and
b.to the husband (or at his election to The [Cuneo] Family Trust) such sum as may be required to effect the Percentage Division.
14. That the amount payable by the wife at clause 13(b) above be adjusted by reference to the amount of any disparity between the husband’s and the wife’s drawings against Suncorp account number […] for payment of legal expenses and expert reports since the date of separation.
15. The husband and the wife will each be liable for one half of any duty (if any) on any transaction under these Orders, such that, as and when falling due, the each party [sic] will pay one half of the duty will indemnify and keep indemnified the other party in respect of the same:
Subject to the qualifications earlier mentioned, it is sufficient for present purposes to regard the claim on behalf of the wife as being that the property of the husband and wife be divided as to 65 per cent to the wife and 35 per cent to the husband, it being apparent from final submissions on behalf of the wife that it was asserted that such property should, on the evidence, represent between 75 per cent and 85 per cent of the asset pool worth approximately $4,000,000.00.
By his Application, Mr G Cuneo (variously referred to in the proceedings as “the intervenor”, “the son” and “[G]”) sought that he receive 25 per cent of “specific” “matrimonial property” (the subject of proceedings between the husband and wife) pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) or, in the alternative by way of relief in the exercise of the Court’s accrued jurisdiction, a declaration of trust in his favour as to 25 per cent of such property, with consequential orders to give effect to such declaration. It is apparent from final submissions made on behalf of the son that his claim includes, by way of further alternative relief, an order for the payment of a sum certain on a quantum meruit.
It is evident that the wife supports the son’s claim, at least as to 20 per cent of the assets referred to by him (inferentially approximately $4,000,000.00 less approximately $260,000.00 of superannuation interests) and does not oppose relief in favour of the son with respect to 25 per cent of such assets. The husband opposes the granting of relief to the son in accordance with any part of the claim made by him.
CREDIT
Credit assumes significance in the proceedings in relation to a limited number of important issues.
The evidence of the son is able to be accepted without qualification. So doing however does not materially advance matters given that, ultimately, there is little emerging from the evidence of the son, as that evidence became clear during his cross examination, which conflicts with the evidence of either of his parents in relation to the matters significantly impacting upon the determination of the claims of each of the parties. As will be seen, within the context of a consideration of each of the son’s claims, those claims fall to be determined on the basis of the son’s own evidence given that, to the extent that there is any crucial conflict between the evidence of the son and either of his parents, which the Court doubts, the evidence of the son is able to be preferred. The son impressed as a witness of truth who was, by virtue of his willingness to make concessions and admissions, the best witness in the husband’s case. The Court is unable to recall any aspect of the son’s evidence which calls into question his honesty or reliability as a recounter of fact.
As between the husband and wife, the issue is rather one of the reliability of recall of facts than the honesty of either party in undertaking that exercise. The Court has no doubt that each of the husband and wife genuinely believes that their recollections of history are accurate. In the case of the wife, such belief has not been shown to have been other than substantially well founded.
10. For reasons which are not difficult to understand, and which appear in the medical evidence associated with the husband’s claim for Department of Veterans Affairs (“DVA”) benefits, the husband’s recollection of certain events is less than entirely accurate. The husband’s evidence is in conflict with his own prior statements with respect to his behaviour, his conduct towards the wife, and his reliance upon the son with respect to the conduct of operations on the farm. The husband finds himself in the unenviable position of having made representations to the DVA for the purpose of obtaining benefits, to which he has been found to be properly entitled, which does not rest comfortably with some of the evidence he has given in relation to those issues during the trial. The options appear to be, that the evidence given to DVA was untruthful, or that such evidence was truthful, and that the condition diagnosed by the DVA specialist medical practitioners has caused or contributed to the husband giving evidence in these proceedings which is less than accurate. On the totality of the evidence, the latter option is to be preferred.
11. As will be seen, the impact of the Court’s finding with respect to credit is limited to a small number of contribution issues, notably the wife’s “Kennon claim” and, to a lesser extent, the nature and quality of the husband’s contributions to farming activities. The two issues are not ultimately entirely independent of each other in their significance. In relation to the former, there is, unsurprisingly, little evidence beyond that of the parties themselves whilst, in relation to the latter, there is a dearth of evidence which is instructive.
MATERIAL FACTS
12. A chronology of dates and events relevant to the proceedings provides background to the dispute.
13. The husband was born in 1945. He is accordingly approaching his sixty first birthday. The wife was born on in 1947. She has accordingly just had her fifty ninth birthday.
14. The parties met in 1965. In July 1966 the husband was “called up” for National Service in the Australian Defence Force. In 1967 the husband was posted to Vietnam where he saw active service. The husband was honourably discharged from the Australian Defence Force in July 1968.
15. In July 1968 the husband’s father sold one of his tobacco farms (the “[H] farm”) to the husband and his brother V for $40,000.00, the payment of which was made, interest free, out of the proceeds of a crop then apparently growing on the property. No deposit was paid for the purchase of the property.
16. In December 1968 the husband and wife became engaged, and married in April 1969. The husband and wife then commenced to live at the H farm where they grew tobacco in partnership with V.
17. G, the parties’ son, was born on in 1971. G will turn 35 on the same day as his father turns 61. The second child of the marriage, L, was born on in 1973. L is accordingly 32 years of age.
18. In 1974 the husband and wife purchased a block of Crown land at A comprising some 525 acres, the cost of which was approximately $17,000.00. The parties do not agree as to whose funds were used to purchase the property although it is clear that the parties had been married for some 5 years by that time.
19. The husband and his brother V contracted share farmers to grow tobacco on the H farm whilst the husband cleared the A block. The tobacco quota on the H farm was leased.
20. The husband and wife continued to reside on the H farm, leaving there in 1979.
21. In about 1975 the parties’ first rice crop was planted on the A property, that apparently being a pioneering venture in that region.
22. In 1976-1979 a house block was excised from the A block (Property A1). By virtue of his active service in the Vietnam War, the husband was able to obtain a Department of Defence loan to finance the construction of a house on A1. The funds from such loan, together with such funds as the parties had by that time accumulated, were used to build a house on A1.
23. In 1978 the husband was elected to a Queensland primary producers’ marketing board and the … Producers Association as a grower representative.
24. In 1979 the parties moved to A where they lived first in a caravan, then a shed, moving finally in December 1979 into the home which they had built on the property.
25. G’s wife N was born in July 1980. She is 25 years of age.
26. In 1981 the husband and V sold the H farm on vendor finance, the sale of the property being completed in 1984. The husband asserts the sale price to have been $150,000.00. The wife asserts $120,000.00. Little turns on that issue for present purposes.
27. In 1982 the husband’s parents gifted a number of flats to their four children. T Pty Limited (“[T]”) was at that time formed or acquired. The shares in such company were at all material times held by the parties and they were the directors of the company.
28. On 23 June 1982, by deed of settlement between Mr C as settlor and T Pty Limited as trustee, the Cuneo Family Trust was created. The trustee of the trust thus created was invested with a discretion with respect to capital and income of the trust. The beneficiaries of the trust included the husband, the wife and their children.
29. On 19 October 1990, by deed of variation of trust, between the settlor and the trustee, the terms of the trust previously created were varied, it appears only insofar as the powers of the trustee were expanded.
30. By further deed dated 28 June 1993, the powers of the trustee were further expanded.
31. In 1984 T Pty Limited purchased 630 acres of fully developed farming land at a cost of approximately $500,000.00, $75,000.00 of which was obtained from the proceeds of sale of the H farm, the balance being obtained on loan from the Primary Industry Bank of Australia (“PIBA”).
32. In November 1988 the wife’s mother died and the wife’s inheritance of $30,000.00 was deposited into the joint farm account of the parties. It was in about that year that the wife alleges that the husband’s behaviour changed in ways which are relied upon to support the wife’s “Kennon” or “special contributions” claim. The husband denies any such changes or other basis for such claim or claims by the wife.
33. In 1990 the parties commenced to grow sugar cane on the farm. In that year the rice industry failed. Thereafter sugar cane was planted.
34. By 1992 the parties were substantially in debt and refinanced their indebtedness.
35. In 1993 the husband deposited the proceeds of sale of one of his inherited assets to the farm account, a sum of not less than $27,000.00 resulting.
36. In 1993 the husband’s father died.
37. In 1997 the husband inherited $13,000.00 from his mother’s estate.
38. In 2001 the husband applied to the DVA for a disability pension, such disability being asserted by him to have been the result of his service during the Vietnam war. In April 2002 the husband was granted an 80 per cent disability pension by DVA, such entitlement being backdated to February 2001.
39. The parties separated in October 2002, at which time the husband moved into a rural town where he has since been living. The marriage of the parties was dissolved in February 2004.
40. In March 2004 the husband received approximately $49,000.00 as a result of the sale of inherited assets. He used approximately $30,000.00 of such money to pay out a loan on a Peugeot motor vehicle which he retains and deposited the balance into his investment account.
THE PROPERTY OF THE PARTIES TO THE MARRIAGE
41. Subject to their property being reduced as a consequence of any successful application by the son, the property of the parties is not substantially in dispute. Set out in table form hereunder, and deriving from Exhibit H12, an agreed statement of the assets and liabilities of the parties, the property of the parties is worth $4,141,532.00 net. Some clarifying comments with respect to the agreed assets and liabilities of the parties are appropriate.
| PROPERTY POOL & RESOURCES | |||
| Assets | |||
| Lot 151 T Pty Limited Farm | T Pty Limited | $1,042,500.00 | |
| Property A2 - R & M Cuneo Farm | Joint | $745,000.00 | |
| Property A1 - Former Matrimonial Home | Joint | $175,000.00 | |
| Water Allocation - 2982 megalitres | T Pty Limited & Joint | $864,500.00 | |
| Plant & Equipment | T Pty Limited | $325,000.00 | |
| House contents - matrimonial home | Joint | $5,000.00 | |
| House contents - husband's residence | Husband | minimal | |
| Vehicles - Bedford Truck | Husband | $0.00 | |
| Vehicles - Peugot - Redbook values | Husband | $23,100.00 | |
| Vehicles - Ford Falcon - Redbook values | Wife | $19,100.00 | |
| Shares - MCM "B" Class Shares | T Pty Limited | nominal | |
| Shares - MCM "B" Class Shares | Joint | nominal | |
| Shares - ST Limited "G" Class Shares - 30447 @ .39c | T Pty Limited | $11,874.00 | |
| Shares - ST Limited "G" Class Shares - 26495 @ .39c | Wife | $10,333.00 | |
| Shares - ST Limited "G" Class Shares - 26495 @ .39c | Husband | $10,333.00 | |
| Shares - NQ Co-op Tobacco Growers | Husband | $1,002.00 | |
| Bank Accounts - Suncorp working account - estimated (see Income Stream) | T Pty Limited | ||
| Bank Accounts - Suncorp Select access as at 30.06.05 | Wife | nominal | |
| Bank Accounts - Suncorp Farm Management as at 30.06.05 | Wife | $70,000.00 | |
| Bank Accounts - National Investment Account … as at 30.06.05 | Husband | $40,743.00 | |
| Bank Accounts - National Bank Account … as at 30.06.05 | Husband | $18,471.00 | |
| Bank Accounts - Suncorp Select as at 30.06.05 | Husband | $0.00 | |
| Bank Accounts - Suncorp Farm Management | Husband | $70,000.00 | |
| TOTAL ASSETS | $3,431,956.00 | ||
| Superannuation | |||
| AXA Australia - Policy … | Husband | $18,425.00 | |
| Colonial First State - Policy … | Husband | $120,283.00 | |
| Colonial First State - Policy … | Wife | $122,631.00 | |
| TOTAL SUPER | $261,339.00 | ||
| Legal Fees | |||
| Legal Fees | Husband | $83,539.00 | |
| Legal Fees | Wife | $80,701.00 | |
| TOTAL LEGAL FEES | $164,240.00 | ||
| Income Stream from Property | |||
| Seca seed - in Stock re Mr K letter - 17.690 tonnes | T Pty Limited | $145,220.00 | |
| Seca seed - on consignment re D's master sheet - 12.229 tonnes | T Pty Limited | $107,432.00 | |
| Suncorp working account - estimated (see Income Stream) | T Pty Limited | $68,000 | |
| Gross Cane Payments to come - est. on no further deductions | |||
| Farm 23 - Bundaberg Sugar estimated income | T Pty Limited | $137,072.00 | |
| Farm 23 - Less payment to be made Gross ($55,605.08 nett) | T Pty Limited | -$89,910 | |
| Farm 24 - Bundaberg Sugar estimated income | Joint | $342,143.00 | |
| Farm 24 - Less payment to be made Gross ($132,831.55 nett) | Joint | -$224,455.00 | |
| Estimated Nett Can Payments to come - estimated on third cut 40 hectares @ 95 tonnes per hectare = 3800 tonnes @ $25.00 | $95,000.00 | ||
| TOTAL INCOME STREAM | $580,502.00 | ||
| TOTAL ASSETS/INCOME/RESOURCES POOL | $4,438,037.00 | ||
| Liabilities | |||
| Bank - Term Loan Suncorp Metway … - 13.06.05 | T Pty Limited | -$31,238 | |
| Bank - Chattel Mortgage - Sunc … - 13.10.05 | T Pty Limited | -$41,011.00 | |
| Bank - Lease - Suncorp Metway … - 13.10.05 | T Pty Limited | -$32,463.00 | |
| Bank - Lease - Suncorp Metway … - 13.10.05 Residual | T Pty Limited | -$38,225.00 | |
| Tax - 2004/2005 | Wife | -$78,125.00 | |
| Tax - 2004/2005 | Husband | -$75,443.00 | |
| TOTAL LIABILITIES | -$296,505 | ||
| TOTAL NETT POOL | $4,141,532.00 | ||
| Resources | |||
| Department of Veterans' Affairs Pension | Husband | $96,823.00 | |
| RETENTION BY HUSBAND | |||
| NQ Co-op Tobacco Growers | Husband | $1,002.00 | |
| Peugeot - Redbook values | Husband | $23,100.00 | |
| National Investment Account … as at 30.06.05 | Husband | $40,743.00 | |
| National Bank Account … as at 30.06.05 | Husband | $18,471.00 | |
| Suncorp Farm Management | Husband | $70,000.00 | |
| Legal Fees | Husband | $83,539.00 | |
| ST Limited "G" Class Shares - 26495 @ .39c | Husband | $10,333.00 | |
| Tax - 2004/2005 | Husband | -$75,443.00 | $171,745.00 |
| RETENTION BY WIFE | |||
| ST Limited "G" Class Shares - 30447 @ .39c | T Pty Limited | $11,874.00 | |
| ST Limited "G" Class Shares - 26495 @ .39c | Wife | $10,333.00 | |
| Ford Falcon - Redbook values | Wife | $19,100.00 | |
| House contents - matrimonial home | Joint | $5,000.00 | |
| Legal Fees | Wife | $80,701.00 | |
| Suncorp Farm Management | Husband | $70,000.00 | |
42. The shareholders in and directors of T Pty Limited at all material times have been the husband and wife, T Pty Limited being the trustee for the Cuneo Family Trust which was created by deed of settlement dated 23 June 1982. T Pty Limited does not have any existence other than as the trustee of the Cuneo Family Trust.
43. As was submitted on behalf of the husband, wherever possible, the “snapshot” which the agreed table of assets and liabilities constitutes was “taken” as at 30 June 2005.
44. Included in the list of assets are superannuation interests of each of the parties totalling $261,339.00. The entitlement of the husband with respect to such interest is approximately $128,000.00, whilst the interest of the wife is approximately $122,000.00. Quite apart from the fact that the parties have chosen to include superannuation interests as assets in the inventory, the quantum of such interests relative to other interests and the decision of the majority in C v C (2005) FLC ¶ 93-220 incline the Court to treat the superannuation interests in the same manner as the other assets of the parties rather than, consistent with Norbis v Norbis (1986) 161 CLR 513, have regard to such interests separately from the other interests appearing in such inventory, although that course is also consistent with the decision of the majority in C v C.
45. With respect to the derivation of legal fees paid by the parties, having been the assets or income generated by the property of the parties or either of them, to add back such sums is logical albeit, given the minimal difference between the two sums, particularly relevant to the total net asset pool, doing so or refraining from doing so is likely to have little bearing upon the outcome of the proceedings.
46. Under the heading “Income Stream from Property”, a number of items appear, such items totalling $580,502.00. In farming cases it is often difficult to determine how to treat harvested crops, growing crops and other items which are in the nature of stock in trade. In this case, the Court is comfortable with the approach adopted by the parties, given the desirability of obtaining a “snapshot” and the reality that, in the table set out above, as well as estimated income from produce, estimated expenses are also contained. As Counsel for the wife made clear in his written submissions, including these sums is one thing, determining contribution based entitlements to them, however, remains a separate and rather more vexed question.
47. The total liabilities, particularly as they include figures for income tax for each of the parties, do not require comment.
48. The total net pool of assets of the parties accordingly approximates $4,141,532.00.
49. The husband has a financial resource being a DVA pension valued at $96,823.00
50. Exhibit H12 refers to benefits retained by each of the parties. Those entries, it is clear from Exhibit H12, indicate the fate of a number of assets which appear in the preceding inventory of assets. Their “retention” thus assumes significance only at the point of determining how such orders as the Court concludes to be just and equitable as between the husband and wife, should be implemented given that each of the parties has retained the assets identified in those two portions of the document headed “retention” and, in the case of tax liabilities, will “retain” such liabilities, the liabilities having been taken into account in arriving at the total net asset pool.
51. It is self evident that, to the extent that the son’s claim against the parents is successful, the total net pool is liable to be reduced, whether that be in some percentage terms relative to certain assets or by way of charge over such assets in the sum certain or by way of joint and several liability for the payment of a debt, should the final limb of the son’s claim be the measure of his success. It is thus convenient to consider the son’s claims before examining the competing claims of the parties to the marriage.
THE CLAIMS OF G CUNEO
THE EVIDENCE OF MR J
52. A convenient starting point for this exercise is the evidence of Mr J, a chartered accountant. This evidence assumes direct significance with respect to the second alternative claim on behalf of the son but is also relevant to a consideration of his primary and first alternative claims.
53. Mr J, who practises in Brisbane, prepared a report in support of the claim of the son on 14 October 2005. As a reading of the transcript of the trial would reveal, the question of the content of Mr J’s report and cross examination of him on that report periodically arose for discussion, the trial itself concluding, save for submissions and the consideration of Mr J’s report, without there having been either rulings with respect to the status of Mr J’s report or cross examination of him on the report.
54. Subsequent to the trial concluding in Cairns, Mr J prepared a supplementary report dated 23 November 2005, such report being annexed to an affidavit sworn by Mr J on 29 November 2005. There has not been any objection to any part of Mr J’s report, nor has there been cross examination of Mr J on such report. As was appropriate in the circumstances, Mr J noted in his affidavit that “all facts and circumstances” “deposed to” in his report were “within my own knowledge save such as are deposed to from information only and my means of knowledge and sources of information” which “appear on the face of this my affidavit”, which would appear to be more accurately described as a reference to Mr J’s actual report.
55. The second report was prepared after the evidence of the parties, during the course of which the terms and conditions upon which the son was employed by his parents, and the benefits received by him, were the subject of extensive agitation. As Mr J noted, his report was prepared in the light of discussions had by him with Mr Page, Senior Counsel for the husband, upon whose interests the son’s claim was, at least in a practical sense, most likely to impact if successful. Such consultations, combined with the absence of cross examination of Mr J by Senior Counsel for the husband, enables the Court to comfortably accept that Mr J’s evidence is soundly based. To the extent that there is any dispute in that regard, such dispute would appear related substantially to the “value of the board” provided to the son by the parents and, subsequent to his doing so, the son’s rent free occupancy of a home owned by the parents and located on the parents’ farm.
56. Senior Counsel for the husband referred to the evidence of Mr O with respect to the rental value of the property between 7 March 2001 and 11 March 2005, which, it was submitted, represented “a total benefit to [G] [the son] of $28,000”. It was submitted that the Court would prefer that “evidence over any assessment of the rental value by [Mr J]” (Submissions of Applicant Husband, paragraph 25). The submissions by Senior Counsel for the husband in relation to “THE CLAIM BY THE INTERVENOR SON” (paragraph 16-50 inclusive), other than in this extent, focus substantially on the appropriateness or otherwise of Mr J’s calculations.
57. Mr J concluded, in reliance upon the documentation provided to him, that the son had received in wages and/or other benefits, including non-cash benefits, $496,494.00, some $59,000.00 less than would have been his entitlement under the Queensland Sugar Industry Award or, had he been employed as a fitter in accordance with the relevant engineer’s award, some $92,476.00 over the period in which he worked for his parents. That period was essentially from at least the time he left school until the present, a period of approximately 16 years.
58. To the above figures Mr J added an interest component, calculated at a rate of 9 per cent per annum simple interest (paragraph 5.3 page 4). So doing produced figures of $92,537.00 and $158,101.00 respectively.
59. Mr J quantified “non-cash benefits” received by the son between 1987 and 2004 in the sum of $64,704.00, such sum comprising two components, “board” paid by the son pursuant to the somewhat unusual, but undisputed basis emerging in evidence and, as and from 2001, when the son married and moved into another house on the property, the rental value of such accommodation.
60. It was submitted by Senior Counsel for the husband, in reliance upon the evidence at trial, that the two “non-cash benefits” should approximate $82,168.00. The disparity between the two figures, less than $18,000.00, is substantially referrable to the rental value of the cottage occupied by the son and his wife subsequent to his marriage. The evidence does not establish that, however novel its calculation, the figure for “board” between 1987 and 2001 was unreasonably high relative to the goods and services which the son was receiving by way of “board”. As Senior Counsel for the husband submitted, there is expert evidence in relation to the rental value of the cottage. There is no reason not to accept that evidence. So doing, the Court prefers the figure asserted by Senior Counsel for the husband of $82,168.00. It follows that the remuneration received by the son between 1987 and 2004 in money, goods and/or services was $513,958.00 ($496,494 + ($82,168-$64,708)).
61. There is no basis for rejecting the accuracy of Mr J’s calculations with respect to interest, if it be appropriate to include an interest component with respect to any monies found to have been payable to the son but not in fact paid by his parents to him.
62. The more significant question remains, whether the extent, if any, to which the actual remuneration received by the son fell short of a reasonable remuneration for his labours on the farm on behalf of his parents over the years of 1987-2004? To the extent that Mr J’s figures are based upon the wage books, such reliance was justifiable. It is less than clear that any of the parties suggested that the wage books were other than accurate until the current litigation began. To the extent that the wage books may not be totally accurate, the evidence suggests that they err on the side of under rather than over recording the hours worked by the son.
63. If the Court concludes that the Sugar Industry Award is appropriate, the Court accepts that Mr J’s methodology accurately reflects the implications of that award, having regard to what the evidence establishes as being the hours the son worked. The same obligation applies if the Court finds that the Engineers’ Award was the relevant award.
64. Putting to one side the question of interest, the extent to which the son may have received less than proper remuneration between 1987 and 2004 is thus approximately $40,000 if the Sugar Industry Award applies and about $72,000 if the Engineers Award applies. It is appropriate therefore to consider the extent to which the benefits received by the son in cash and otherwise, represented adequate remuneration for his efforts over the period 1987 to 2004.
65. In that context, it is appropriate to consider first the submissions on behalf of the son. Unsurprisingly, there is some overlap between submissions which address matters contained in Mr J’s report and the broader claim of the son. The latter will require careful consideration later in these reasons. The former however can conveniently be addressed at this stage.
66. Such qualifications as the son obtained were asserted to have been “machinery-related, were obtained in order to further his usefulness on and about the farming enterprises, and he did use these qualifications for that purpose” (Submissions of the Intervenor Son, paragraph 13.3). It was submitted that the son worked:
… up to 80 hours per week (averaged at about 70 hours when required to be more exact about the time worked when discussing his work history with the joint expert, [Mr J]) from the age of 17 years, immediately upon leaving school, for an unbroken period of about 18 years. (Submissions of Intervenor Son, paragraph 13.4)
67. It was submitted that the son “regularly worked weekends, evenings, and long hours notwithstanding the failure of his parents to renumerate him for these additional employee contributions” (Submissions of Intervenor Son, paragraph 13.7).
68. Of the curious arrangement governing calculation of the son’s “board” from 1987-2001, it was contended that:
… when he worked greater hours (and therefore, of necessity, was absent from the home environment for greater periods) he paid more board, when logic would dictate the reverse ought to occur (Submissions of Intervenor Son, paragraph 13.9)
69. The son’s activities on the farm in the course of his employment were submitted to:
… well exceed that of farm labourer, and, in addition to the ‘on call’ contributions, he worked variously as a machinery operator, manager, mechanic (fitter) and truck drive – none of which occupations are reflected in the remuneration he was paid. (Submissions of Intervenor Son, paragraph 13.13)
70. Reliance was placed upon the fact that the son was:
not challenged either as to his affidavit evidence that he worked up to 80 hours per week, nor to his calculation (average) conveyed to the joint expert that his overall working hours during the course of his employment were about 70 hours per week (Submissions of Intervenor Son, paragraph 14)
The Court’s observations with respect to credit appearing earlier in these reasons are relevant in this context.
71. There is no reason not to accept the evidence of the son as to the hours which he in fact worked, being an average of about 70 hours per week. The impact on Mr J’s calculations of accepting the son’s claims of an average 70 hours per week is taken up by Mr J (paragraph 5.10, page 8) in his assumption that the son “worked on average 70 hours per week up to the date of marriage and 60 hours per week thereafter”.
72. To the extent that Mr J’s calculations with respect to the Sugar Industry Award and the Engineers Award reflect the evidence of the son, there is no reason not to accept the factual basis for those expressions of expert opinion (see Makita (Australia) Pty Ltd v Sprowles [2001] 52 NSWLR 705). Quite apart from the absence of any reason to reject the evidence of the son, the matters referred to by Counsel for the son in relation to the contents of the wage records themselves support so doing. Although no one complained at the time, it is, as Counsel for the son has submitted, improbable that the hours reflected in the wage books “accord … with the common sense reality of ‘life on the farm’ ”. A number of instances supportive of that conclusion were suggested by Counsel for the son (Submissions of Intervenor Son, paragraph 17).
73. It was submitted that the Court would prefer the unchallenged evidence of the son to the limited, and reluctant, concessions of the husband with respect to the duties performed by the son over and above those which could reasonably be expected of a salaried farm worker. The Court agrees that the cross examination of the son does not provide the foundation for rejecting the son’s claims in that regard. Reliance was sought to be placed upon the concessions by the husband that:
… the machinery and truck-driving licences obtained by his son were for the purpose of working the farm, and save for the articulated truck licence, the son did indeed utilize those skills for the benefit of the farm. (Submissions of Intervenor Son, paragraph 16).
74. On behalf of the son, reliance was placed upon the evidence of the husband that other workers had been paid “a greater sum than his son”, particularly to obtain the services of such workers at weekends (Submissions of Intervenor Son, paragraph 18). Reliance was placed upon the inability of the husband to “point to any award upon which he based the son’s salary” (Submissions of Intervenor Son, paragraph 20). It can fairly be said that reference to the Sugar Industry and Engineers Awards are creatures of this litigation rather than matters which at any time assumed significance, or even relevance, within the constellation of the parties to this litigation.
75. Reliance was placed upon evidence of the husband, that there had been “occasions when he did not pay the Intervenor wages notwithstanding he was working on the farm, during periods of financial difficulty for the parents” (Submissions of Intervenor Son, paragraph 21).
76. Reliance was placed upon inconsistencies emerging during cross examination of the husband insofar as his claims with respect to the son’s hours worked and the wage records were concerned (Submissions of Intervenor Son, paragraph 22).
77. Under the heading “Quantum of Claim” it was submitted on behalf of the son that:
The joint expert’s evidence is unchallenged. The only aspect which might be considered a challenge, are the schedules put to the expert by senior counsel for the husband, which go no further than calculating the accuracy of the wages had the hours worked been as set out in the wages books. The Intervenor’s evidence is that he worked an average of 70 hours per week annually, and at times up to 80 hours per week. This is unchallenged. (Submissions of Intervenor Son, paragraph 33)
78. It was further submitted that:
… having regard to the type of work undertaken by the Intervenor, it would be appropriate to adopt the Sugar Industry Award, at the very least. It has been admitted by the husband that the son attended to the servicing, in part at least, of the farm vehicles; that the son was largely the worker running the cane farm when the husband was fully engaged in Seca seed growing; and that, during the lengthy period of his mental illness, he would not have been able to continue the farm were it not for the assistance of his son (Exhibit W1). The court would not accept, it is submitted, that the husband can at once rely upon the son’s imperative assistance for the purposes of obtaining a Veteran’s Affairs Pension, and also deny the same factual basis when defending the son’s claim to have been of the critical assistance admitted by the husband to the Commonwealth authorities (the so-called Elias principle). (Submissions of Intervenor Son, paragraph 34)
79. Without conceding that the son’s claim should be limited to quantum meruit, it was submitted that Mr J’s evidence with respect to the Sugar Industry Award should be accepted and that it would “be reasonable to assume the Intervenor could have expected to have been paid pursuant to the Sugar Industry Award had he not worked for family” (Submissions of Intervenor Son, paragraph 36). It was thus accepted that, exclusive of consideration for the additional contributions of monies, plant and equipment, and general availability for most days, and at times, “if needed”, the son’s entitlement should be found, in accordance with Mr J’s opinion, to have been $559,426.00, a figure which is slightly at variance with the $555,725.00 which appears in Mr J’s second report.
80. Unsurprisingly, the submissions of learned Counsel for the wife did not traverse, other than inferentially, the matters raised by Mr J’s report. It can safely be concluded from the material before the Court that, nothing raised by or on behalf of the wife poses any impediment to the Court’s acceptance of Mr J’s report in general, and in particular to the adoption of the Sugar Industry Award as the yardstick by which the adequacy of the son’s remuneration between 1987 and 2004 should be assessed.
81. On behalf of the husband, reliance was placed upon the fact that when the son “took up employment with the parties there was no pressing need to employ him save to provide him with the occupation that he had chosen” (Submissions of Applicant Husband, paragraph 22). For the purpose of determining the extent to which the son was adequately and appropriately remunerated for his efforts, the motivation of the parties would appear irrelevant.
82. It was submitted that it was “a term of [G’s] employment that he would be paid by the parties at an hourly rate for the hours which he actually worked on the property” (Submissions of Applicant Husband, paragraph 23), an assertion which is consistent with the evidence. Whether it was, in all the circumstances, an adequate payment remains for determination, particularly given the age of the son at the time the “terms” of his employment were struck and the imbalance in bargaining power as between the parties at that time. It was undoubtedly a term of the son’s employment “that he would be provided with accommodation and board and would be provided by the farming business with certain personal expenses” (Submissions of Applicant Husband, paragraph 24), which in fact was what occurred. Reference has previously been made to the reasons for the Court’s preference for Mr O’s opinion as to the rental value of the cottage occupied by the son in 2001, which occupancy continues.
83. It was submitted on behalf of the husband that:
The hours worked by [G] were entered in the wages book by the Husband and pays calculated by either the Husband or the Wife were based upon the hours worked and the rates provided by the Husband (Submissions of Applicant Husband, paragraph 26).
Largely for the reasons advanced by Counsel for the son, the Court considers the evidence of the son in that regard to be preferable to the contents of the wages book, to the extent that the two do not accord with each other. Commonsense supports such preference. The improbability of precisely the same hours being worked on a farm over a significant period of consecutive days is difficult to reconcile with the realities of farm life in general, and the evidence of what occurred on this farm in particular. There appears to be an element of reconstruction in the wages book. The Court’s unreserved acceptance of the son as a truthful and reliable witness, and qualified acceptance of the reliability, despite any absence of lack of candour, of the evidence of the husband, further supports such a conclusion.
84. The difficulty for the son however arises from the matter asserted (Submissions of Applicant Husband, paragraph 28) on behalf of the husband with respect to the period subsequent to the son’s marriage on 7 April 2001. From that time the son “completed wage returns for the business providing the hours worked and wages paid to him” which wages were then “calculated on the rate provided by either the Husband or the Wife and paid”. There is no disputing the latter contention, the more difficult question being the extent to which, the son having being the author of the records, his 60 hour per week average in that period should be preferred to what he caused to be recorded in the wage records for that period. Although the distinction, assuming 50 weeks worked, is minimal in some years, such as 2002/2003 when the difference was 107 hours for the year, in 2003/2004 however, the difference was 366 hours or approximately 7 hours per week. A simple and credible explanation for the disparity is that the son did not record all the hours he worked in that period. Having seen and heard the son give evidence, and noted his willingness to concede almost everything sought of him in that regard by Senior Counsel for the husband, the Court has little difficulty accepting that the son’s general recollection can be relied upon to the extent that, overall to what is a very limited extent, the records suggest the son to have worked less than he claims he did. If the son erred in recording his hours, the Court has little doubt that he would have erred on the side of under rather than over stating such hours. Significantly, the son did not ever assert that he had recorded fewer hours than he in fact worked in reliance upon any representation, assumption or belief that he would be rewarded in other ways. Accordingly, the Court is not disposed to go behind the figures upon which Mr J proceeded in terms of the hours the son claims he worked before and after his marriage in April 2001. Whilst this finding assists the son’s claim in quantum meruit, it becomes a hurdle for his other claims as it reduces the scope for asserting contributions which have not been recognised.
85. The submission on behalf of the husband that “[a]t no time between 1987 to date did the Wife or [G] question the rate at which [G] was paid or the hours recorded in the wages books upon which the wage paid was calculated” is undoubtedly accurate having regard to the evidence (Submissions of Applicant Husband, paragraph 29). On the other hand, there is no suggestion that, at least until the son’s marriage in 2001, the son was encouraged to verify the accuracy of the hours recorded in the wage records, or to seek to have increased the wages paid to him. There is no evidence that the son knew or ever had reason to think that he might, or would be entitled to be paid other than at the rates he was. When he first became aware of the Sugar Industry Awards is unclear, but was probably after the current litigation began.
86. It is literally correct to suggest that “[n]o evidence was produced at the trial which justified a finding that the application of the Sugar Industry or the Engineers Award was appropriate to the work carried out by Graham” (Submissions of Applicant Husband, paragraph 30).
87. The latter proposition can readily be accepted and is almost implicit in the submissions of Counsel for the son. Whilst technically, it is correct to submit that there is no evidence which provides a clear and simple foundation for the application of the Sugar Industry Award, that award appears to be the most appropriate or perhaps only useful yardstick so far as any evaluation of the adequacy of the son’s remuneration package between 1987 and 2004 is concerned. Nothing to which the Court has been referred establishes that the entitlement to receive award wages is forfeited if, through ignorance or otherwise, the entitlement is not demanded. Nor has the effect of any “statute of limitations” or the like upon such entitlement been advanced. It is to be remembered that this Court will not be “awarding” the son any entitlement pursuant to any industrial award – if satisfied that it should do so, the Court would be determining a quantum meruit claim by reference to that award. The extent to which the son received less remuneration than a relevant award would have provided is also relevant to his other claims.
88. Perhaps the nub of the husband’s case is most succinctly encapsulated in the submission “[t]hat [G] was paid at a level that was considered by all parties to be appropriate relative to the hours that he worked on the property and was provided with significant benefits in addition to his remuneration” (Submissions of Applicant Husband, paragraph 33). That submission is able to be supported by the evidence. To his credit, the son never suggested that he had regarded his remuneration as inadequate, or that he had ever suggested to anyone that such was the case. The absence of such complaints ought not operate to his detriment, at least in relation to a claim based on quantum meruit.
89. At the risk of being accused of adopting a simplistic approach (to which the Court would plead guilty) the following matters are influential in relation to concluding, as opposed to finding as a fact, that the Sugar Industry Award is “appropriate to the work carried out” by the son. Excluding the Engineers Award, which has at best a tenuous periodic connection with the work done by the son, no other award is suggested to be potentially relevant to an evaluation of the adequacy of the son’s remuneration package. The primary business activity conducted on the farm at which the son was employed was that of production of sugar cane. Absent any agreement in that regard, it would in the circumstances be reasonable to imagine that the Sugar Cane Industry Award would be relevant to the determination of the remuneration package for employees in the sugar industry, as opposed to, for argument’s sake, a mining or pastoral industry award. It not having been suggested that the son was an independent contractor or the like, determining the adequacy of his remuneration by reference to the most apparently relevant industrial award seems logical.
90. No authority to which the Court has been directed provides a mandate for the rejection of common sense in this context. The Court considers that, to the extent that it is relevant to do so, the Sugar Industry Award provides the best yardstick for any assessment of the adequacy of the remuneration package of the son.
91. The submission that “[n]o evidence was given at the trial that superannuation, annual leave provisions or long service leave provisions was a term of [G’s] employment by the parents’ company” (Submissions of Applicant Husband, paragraph 31) is somewhat curious given that, as Mr J records in his report, the son received a superannuation payment of $18,128.00 made on his behalf together with annual leave entitlements of $10,240.00 and long service leave entitlements of $6,417.00. To the extent that any evidence was required to establish these matters, and that Mr J’s report is deficient in that regard, there is no evidence before the Court of the terms of the son’s employment sufficient to establish the absence of any such entitlements. The fact that they were paid suggests that the husband thought that they should be. Similar considerations apply to the expanded submissions (paragraph 32) in relation to these matters.
92. On behalf of the husband it was submitted to be significant:
That [G] was able to save monies from wages earned by him from time to time and from those wages did provide plant and equipment used in the parents’ business, which items have not been included in the schedule of assets and liabilities for division between the parties, each of the parents acknowledging that those items of plant and equipment are the property of [G]. (Submissions of Applicant Husband, paragraph 34)
It would be little short of extraordinary in the circumstances referred to if such items had been included in the schedule of assets and liabilities. More significant is the absence of evidence as to any commercial or other financial return referrable to the use and enjoyment of the son’s plant and equipment by the parents’ business or the corporation through which it was conducted. Whilst not relevant to a claim in quantum meruit, these matters impact unhelpfully upon the son’s other claims.
93. Also asserted to be significant was the fact:
That [G] was able by reason of savings from his wages to indulge in hobbies enjoyed by him and to acquire assets, more particularly a motor vehicle and expensive accessories. (Submissions of Applicant Husband, paragraph 35)
94. The Court does not regard this as relevant to the quantum meruit claim, although it is helpful in relation to drawing inferences or reaching conclusions necessary to determine other aspects of the proceedings before it. With respect to Senior Counsel for the husband, what the son did with his earnings was entirely a matter for him. The immediate focus of enquiry is whether, in the narrow context of his employment contract, the benefits received by the son were appropriate relative to the work undertaken by him and, in the Court’s view, what he might have expected to receive had the award which appears most appropriate for that purpose been invoked. In the context of the broader claims by the son, the significance of any conclusions reached in that regard requires consideration.
95. Similar observations apply to the matters raised in paragraph 36 of Senior Counsel for the husband’s submissions. The absence of any claim of the kind there referred to by the son, simply denies the son the opportunity to assert that, unlike successful plaintiffs in some of the authorities to which the Court has been referred, the actions in support of an alleged state of mind did not result in the son accepting or being obliged to endure other than a reasonable standard of living.
96. A number of matters were, fairly, referred to by Senior Counsel for the husband in the context of the son’s terms of employment. These include that the son’s:
… presence on the property and as a member of the family employed by the parties did provide to them some benefits in that there was a second person other than the Husband available to deal with emergencies from time to time. (Submissions of Applicant Husband, paragraph 39)
It takes but a moment’s reflection to realise the benefits to a farmer of having a trusted and reliable employee resident upon the property, willing and able at any time, without regard to possible financial gains, to deal with the kinds of emergencies which are part of farm life. That needs to be considered in the context of the son’s other claims, and totality of the evidence in relation to the financial and non-financial benefits the son received.
97. The evidence before the Court provides an adequate foundation for concluding that, in the absence of an agreement between the son and his employer (his parents through a corporation controlled by them) not to do so, the son’s employment would on the balance of probabilities have been governed by the terms of the Sugar Industry Award had the parties directed their minds to the issue. The Court is not persuaded that the award can only be applied for the purpose of the quantum meruit claim if there had been an express or implied agreement to apply it.
98. For reasons earlier given, and notwithstanding inconsistencies between the son’s evidence and records contemporaneously prepared by him relating thereto, the Court accepts that, on average the son worked approximately 70 hours per week from 1987 – 2001 and thereafter, from the time of his marriage in April of that year, reduced his hours to approximately 60 hours per week. The Court accepts that, whilst there was no complaint in that regard, the son received benefits (including non-cash benefits) of $513,958.00, whereas, had he simply been working for wages under the Sugar Industry Award, and receiving the other benefits he in fact received worth some $82,000, the son would have been paid and/or benefited to the sum of approximately $555,725.00, or $41,767.00 more than he in fact received from his employer.
99. Whilst, having regard to the cash rate from time to time fixed by the Reserve Bank of Australia, particularly in recent years, the 9 per cent interest rate applied by Mr J appears somewhat generous, the absence of challenge to that figure, and the reality that, during the earlier parts of the son’s period of employment rates were much higher than they are today, combined with the absence of any other figure to which regard could safely be had, inclines the Court to accept that a notional interest component of 9 per cent as suggested by Mr J would be appropriate, particularly as this is calculated on a simple interest basis.
Adopting a pro rata approach to Mr J’s interest component of $33,306.00 based on a shortfall of $59,231.00, the Court concludes having regard to a shortfall of $41,767.00 it would be appropriate to have regard to interest of approximately $24,486.00. Inclusive of the “shortfall” and such interest, the son would thus have made out a case for receiving $65,253.00 more than his actual benefits with respect to his employment by his parent’s corporation. That aspect of the son’s claim has been resisted on the merits. Sensibly, there has been no assertion that the Court lacks the power to grant that relief. Had the son been thus paid, taxation would have reduced the sum in ways that are unlikely in the present circumstances. The sum is thus worth more to the son in real terms than the basis upon which it is calculated would imply.
The more difficult question is what, on all the evidence, is the significance of the Court’s conclusion. The submissions by Senior Counsel for the husband, with respect to the benefits received by the son, which he accepted without demur over a period of 17 or 18 years in circumstances where he was aware of the basis of his remuneration, the hours he worked, and, from April 2001, determined what would be recorded in that regard, and the flexibility in terms of when the son performed his duties which could not readily be assumed to be available to all employees in more arm’s length employment relationships, do not deny the son success on his quantum meruit claim, but that claim is the last alternative relief sought by the son. It is thus appropriate to consider the primary and first alternative claims made by the son.
THE SON’S PRIMARY AND FIRST ALTERNATIVE CLAIMS
In final submissions made on his behalf, Counsel for the son encapsulated and quantified his claim in the following terms:
The intervenor is a child of the marriage between the applicant and respondent. His claim to an entitlement from the property of his parents is made on the alternative bases of s.79 of the Family Law Act 1975, and pursuant to a trust, in that his parents hold certain items of their property on trust for him. This property is set out in the Case Outline filed on behalf of the Intervenor, at p. 3. The values ascribed to these assets has since been agreed between the parties, and is contained in the agreed schedule of assets (Exhibit H12). The total value of assets claimed is $2,965,687.00, of which total the Intervenor claims 25%, being $741,421.75. The Intervenor’s claim is for a transfer to him of one-quarter of the named assets. However, the Intervenor recognizes that, pursuant to the taxation liability schedule prepared by the accountant’s for the wife (Exhibit W4), that is may be more financially sound for all of the parties were he to accept from the pool a sum of money equal to the percentage of property sought. Such an order would be acceptable to the Intervenor, and would permit him to buy a share of the property from his mother, assuming she retains the farming enterprise pursuant to these Orders. The Intervenor otherwise supports the orders sought by the respondent wife. (Submissions of Intervenor Son, paragraph 1)
As submitted on behalf of the son, it is “not in contest” that the son had worked from childhood on the farms owned by his parents and/or T Pty Limited, having always expressed a desire to be a farmer, and to continue working on the family properties. It is clear that the wife supports the son:
… in his goal of remaining on the farms, and of his desire to become a part-owner of the properties with the applicant wife, for the purpose of continuing the enterprise jointly between them. (Submissions of Intervenor Son, paragraph 2)
The son’s case was submitted to be:
… based on his contributions to the farming enterprise, by way of labour, injections of capital and the supply of plant and equipment from time to time; his acceptance of minimal income (agreeing to be paid whatever his father chose to pay him, irrespective of whether he worked nights, weekends, or week days) with the expectation that his work was contributing to the family assets of which he had an expectation would, at least in part, be his in the future (and in respect of which his parents did not disabuse him); and on his choice of a career on the farm, again, in the expectation that it would be his life’s work. He did gain some qualifications, such as fork lift operator, backhoe tickets, and both rigid and articulated vehicle licences, for use on and about the farm. (Submissions of Intervenor Son, paragraph 3)
Reference was made to a number of authorities to which the Court will necessarily later refer in these reasons.
It was submitted that the matter of significance emerging from the evidence and supporting the son’s claim were the following:
13.1 He worked from his childhood on his parents’ farm, with the expectation that he would, in the future, be a part owner, at least, in the property;
13.2 He did not pursue outside interests or independent career qualifications because he believed, a belief not disabused by either of his parents, that his future lay in the farm;
13.3 The qualifications he did obtain, which were machinery-related, were obtained in order to further his usefulness on and about the farming enterprises, and he did use these qualifications for that purpose;
13.4 He worked up to 80 hours per week (averaged at about 70 hours when required to be more exact about the time worked when discussing his work history with the joint expert, Mr J) from the age of 17 years, immediately upon leaving school, for an unbroken period of about 18 years;
13.5 He was not paid for the hours he worked, but accepted whatever his parents chose to pay him, with the knowledge and expectation that he was, in effect, working for the family farm, of which he was part;
13.6 He was never paid overtime, weekend penalties, holiday leave loading, sick pay, or long service leave, and nor did he ever seek such payment from his parents;
13.7 He regularly worked weekends, evenings, and long hours notwithstanding a failure of his parents to remunerate him for these additional employee contributions, because he “trusted his parents to do the right thing”;
13.8 He was available almost 24 hours per day, 365 days per year, with few exceptions, in the event that anything was needed for the farms, or anything required to be done on the farms, such as checking watering systems;
13.9 He accepted a deduction from his entitlements to the extent of up to $2.00 per week for “board” notwithstanding that at times he worked up to 80 hours per week (indeed even the evidence of the husband through the wages book – Exhibit H3 – reveals that immediately upon the commencement of his employment at age 17 years he worked up to 73 hours in one week: page commencing 13/11/87 to following page) – with the concomitant anomaly that when he worked greater hours (and therefore, of necessity, was absent from the home environment for greater periods) he paid more board, when logic would dictate the reverse ought occur if there were no ulterior expectations or intentions on the side of both himself and his parents;
13.10 He was not paid according to any award. He accepted what was given to him without question. He was part of a family working towards the advancement of the farming enterprises;
13.11 Despite his harsh (emotional) treatment from his father, he nevertheless supported his mother and stayed working on the farm in support of her, and she of him, even prior to the husband departing the farm, with the expectation that they would continue to run it together, during the period when the husband was unable to adequately work the farm due to his mental health problems;
13.12 He took on the management role of the farm whilst his father concentrated on the growing of Seca seed;
13.13 The Intervenor’s contributions well exceed that of farm labourer, and, in addition to the ‘on call’ contributions, he worked variously as a machinery operator, manager, mechanic (fitter) and truck driver – none of which occupations are reflected in the remuneration he was paid. That he did so willingly and without question as to the level of remuneration, do not detract from the substantial nature and worth of the contributions.
The Court earlier dealt with the matters referred to under the heading “failure to challenge to [sic] the intervenor’s evidence” and recorded its conclusions in that regard. A number of “admissions of the husband” were referred to, some of which have been discussed in the context of the consideration of Mr J’s evidence. It was, in addition to those matters, submitted to be significant that:
The husband admitted, in his affidavit, to effect that had it not been for the son supporting his mother in these proceedings he would have left more of his share of the farm to his son (the Intervenor) in his will, than he would have left to his daughter (page 28, paragraph 111 husband’s trial affidavit). There was no explanation given for the previous intention to leave more to the Intervenor, and in light of the evidence, it is submitted that the only inference which can be drawn from that intention to leave more to the Intervenor, and in light of the evidence, it is submitted that the only inference which can be drawn from that intention, is a desire to recompense the Intervenor for his efforts on the farm (from which he resiled when the Intervenor took the ‘side’ of his wife). (Submissions of Intervenor Son, paragraph 23)
By particular reference to Willets v Marks [1994] QCA 006, it was submitted that the:
… totality of the evidence is sufficient to enable a finding that the farming enterprise of the husband and wife was advanced considerably by the financial and non-financial contributions of the Intervenor; that his expectations were well-founded, realistic, and deserved, and that the parents took no steps to disabuse him in respect of those expectations; that had his parents not separated, he would have justifiably expected to take a share of the farming enterprises, whether by way of inheritance, discounted purchase, gift, or in part by any of those devises. (Submissions of Intervenor Son, paragraph 26)
The evidence was thus submitted to establish that:
The husband and wife’s property holdings have benefited from the contributions of the Intervenor. They have had an ‘on-call’ totally dedicated worker, skilled in most facets of the farming operations, who has not taken sick days, leave other than minimal holidays, and who has been willing to work nights and weekends, as and when requested, without regard for overtime, penalty rates, superannuation, long service leave or leave loadings, for most of his 18 years employment. He has contributed monies when the parents’ stocks were low. He continued to work on the farm during periods of financial difficulty for the parents, without wages. He has bought machinery specifically for use of the farms and allowed it to reduce the taxation liabilities of the parents’ entities, and he has worked for substantially below the appropriate award for his skills, even on the husband’s case. The parents have at least on one occasion discussed in his presence rewarding him with the farm or part of it, in the future. The dissolution of the parents’ marriage and the ‘sides’ taken by the respective parties, ought have no bearing on the son’s expectations and entitlements. (Submissions of Intervenor Son, paragraph 28)
Some of the factual matters relied upon are substantially accurate save, importantly, the suggestions in relation to “rewarding him [the son] with the farm or part of it, in the future”, which assertion, absent a precise reference to such matters, does not accord with the Court’s recollection of the evidence in that regard. Other benefits are overlooked, as is the fact that the son’s own estimate of his working hours, as discussed earlier, has been accepted. In particular, the evidence of the wife, who has supported the son’s claim throughout, was that although there were few specific discussions, there had once been a conversation in the lounge room in which, in response to the son indicating his desire to continue to live on the farm, the husband and wife had stated that when they retired they would “look into him buying into the farm”, that being, the wife suggested, all she could recall of any discussions to that effect, the conversation in question having occurred, “many years ago”.
With all due respect to the submission on his behalf, nothing emerging from the evidence of the wife provides support for the submission that the son accepted less than his due over a long period of time in the expectation of other rewards. The evidence of the son provides no support for such assertions, the son readily conceding that quite apart from the absence of any complaint as to the adequacy or otherwise of the remuneration he had received or terms upon which he was employed, the arrangements which had from time to time been in place offered a “considerable advantage” in a number of respects, notably repaying monies advanced to enable him to purchase motor vehicles, working his own hours “within reason” and living more cheaply in a house on the farm than would have been the case had he been obliged to reside elsewhere.
It was sensibly conceded on behalf of the son that his continued employment on the farm was of his choosing. The submission that the son had “foregone any other career in favour of the farm” (paragraph 30) requires careful consideration. Whilst there is no suggestion that the son had wanted any career than on the farm, the evidence does not establish the probability of any other career, whether more or less potentially commercially advantageous, nor any representation by the husband and wife or inducement by them to influence the son to “forego” any other career in favour of the farm. This is a matter of significance.
So far as the obtaining of qualifications for the “purpose of being more useful on the farm” (Submissions of Intervenor Son, paragraph 30) is concerned, those qualifications were incidental to the son’s desire to be a farmer, and remain with him. They have been taken into account in the Court’s conclusions with respect to the level of remuneration received by him over the years, relative to the duties which he performed. They do not advance the son’s primary claims.
Whilst the Court is attracted by the suggestion that, on all of the evidence, the son may have been paid less than a stranger performing the same duties in the same circumstances would have been entitled to receive, it is something of a quantum leap from a conclusion of that kind to accepting that the son had or has an entitlement to an interest in the farm itself. Similarly, the submission (paragraph 31) that “it could otherwise be expected that the Intervenor would have far more greatly advanced his financial status by this time had he not remained on the farm” is purely conjectural. On the evidence before this Court, all that can be found on the balance of probabilities, is that if the son had been working on a similar farm for strangers in an arm’s length employment relationship, he could have expected to receive the additional monies accepted and identified by reference to the analysis of Mr J’s evidence. There is simply no foundation in the evidence for concluding that the son’s financial position would otherwise have been better today than it is. The evidence also establishes that the son benefited in ways he could not have expected had he worked for strangers.
Whilst it is quite clear that the son does appear, save perhaps with respect to motor vehicles, to have very “modest personal expenditure” and an uncharacteristic lack of desire for holidays, there is no evidence that the son was obliged in any of these respects, that being his choice over a long period of time throughout the great bulk of which he was an adult. As strange as it may seem to some people, the son enjoyed being on the farm more than holidaying elsewhere. The evidence of the son does not establish that he remained on the farm as a result of any “expectation” that “it would be his right or inheritance in the future” (Submissions of Intervenor Son, paragraph 31), and if it were so, that expectation, as Senior Counsel for the husband has submitted, has not been defeated by anything done by either of the parents.
Counsel for the wife, who supported the son’s claim, submitted with respect to the latter’s “constructive trust claim”, that such claim fell within the accrued jurisdiction of the Court. To the extent that there is any dispute in that regard, the Court agrees that the decisions referred to by Counsel for the wife, Warby (2001) FLC 93-091, Finlayson (2002) FLC 93-121 and Foley v Farquharson (2003) FLC 93-126, establish that such relief as the son seeks may be granted if an entitlement in that regard is made out on the evidence.
Counsel for the wife, having referred to a number of authorities to which reference will also later be made, submitted that:
[a]the son has made a demonstrable contribution to the acquisition conservation and management of the property from about age 11 or 12 and thereafter;
[b]the court must balance against that the wages and associated benefits received by the son from about age 17 and thereafter;
[c]the wages and associated benefits received by the son are not the only measure of his contribution – a 24 hour/7 day presence has a value difficult to quantify – as does his ability to “put up with” the father. The wife is not making a criticism – having regard to his illness generally and his evidence that he could not work with others it is fanciful to suggest that any ordinary employee could have filled the intervener’s role.
[d]if the son has given more than he has received then equity would require intervention to declare a constructive trust to that extent. (Submissions of Respondent Wife, paragraph 32, footnote omitted)
So far as the matter referred to in paragraph 32(c) is concerned, the evidence of the son, in fairness to him, does not establish that having to “put up with” the husband was, until the relationship broke down in recent times, any more or less difficult or onerous than working for or with any other employer. In reality, as the cross examination of the son makes clear, other than in very recent times, and certainly post separation of the husband and wife in 2002, or perhaps more accurately since the end of 2003, it is difficult to find anywhere in the evidence of the son, any complaint about any aspect of his employment by T Pty Limited, or either of his parents. With respect, the submission contained in paragraph 32(d) is an over simplified and inaccurate gloss on the authorities which are relevant to this exercise. It by no means follows that the son would be entitled to the benefit of a constructive trust simply because he has “given more than he has received”. The authorities relating to constructive trusts suggest the opposite (see Sirtes v Pryer [2005] NSWSC 1082)
On behalf of the husband it was submitted that the son “made his decision to remain on the parents’ property without any encouragement from either party and that “[n]o inducement was held out to [G] by either party intended to influence his decision to take up employment on the parties’ property” (Submissions of Applicant Husband, paragraph 21). That submission accurately reflects a balanced assessment of the evidence. The submissions in relation to the terms and conditions of the son’s employment from time to time have, to a considerable extent, been earlier addressed. It is however appropriate to record at this stage that the Court does not agree that, by his uncomplaining acceptance of the terms and conditions from time to time provided to him in his employment, the son should now be precluded from seeking, and recovering, the monies to which he was entitled but did not receive. On the evidence before the Court, the son should receive the sum identified earlier and emerging from the evidence of Mr J if neither of the other claims by the son should prove successful.
Having earlier addressed those aspects of the son’s remuneration package, it is not proposed to revisit them here, but rather to focus upon the additional submissions within the context of the son’s constructive trust claim. Relevant in that context is the well founded submission that:
… if [G] had expectations that his continued employment on the parents’ property would or should entitle him to a portion of the property upon the death of either or both of his parents, then such expectation was never conveyed by [G] to the Husband and there is no evidence in the Wife’s material that such expectation was conveyed to her. (Submissions of Applicant Husband, paragraph 37)
The effect of those orders was to terminate the husband’s “involvement” in the farm, and control that of the wife.
It was submitted on behalf of the wife that the husband “from the end of 2003 had ceased any practical work on the farm” (paragraph 23). Reliance was placed upon the fact that:
… no further planting of seca seed occurred, resulting in a draw down of stock and though the ordinary practice would result in planting new sugar cane each year none has occurred since the harvest in 2003. (Submissions of Respondent Wife, paragraph 24, footnotes omitted)
It was submitted that the husband had “made these decisions unilaterally and vetoed the opinions of the wife”, notwithstanding that “[h]is own intention (if he had sole control) would have been to plant cane” (Submissions of Respondent Wife, paragraph 25). It was further submitted that such decisions were made by the husband “because of his enmity with his son” such relationship having “been breaking down well before 2005” and also because the husband “had always made the decisions and was not going to now make them in ‘partnership’ as was required by the legal circumstances that had arisen” (Submissions of Respondent Wife, paragraph 25). It was thus submitted that:
… in the short period of time in mid year when the wife had sole control following a planned but failed settlement, the husband intervened and put a stop to planned planting. (Submissions of Respondent Wife, 2nd paragraph 25)
On behalf of the husband it was submitted that the husband had “kept everything operating” (paragraph 91), an allegation which is able to be accepted, and that on 4 July “he observed that the farm had not been managed appropriately or at all”, an allegation which fails to be made out, and that there were “obvious disagreements between the husband and wife as to the management in that difficult period” (Submissions of Applicant Husband, paragraph 93), an assertion which cannot be doubted.
It was further submitted to be a:
… significant factor that in the 2004 financial year the farm made a loss. In the 2005 financial year, an operating profit of $271,000 was recorded. It is of note that such profit was due primarily to significant increases in the sale of seed, an activity attributed to the Husband’s skills by all of the parties, and by a significant reduction in expenditure on fertiliser and the like, and on seed plants, seed cleaning and drying in that year. Such figures support neither the good management asserted by the Wife and [the Son] in that period or their particular efficiency in the absence of any work by the Husband. (Submissions of Applicant Husband, paragraph 94)
The post separation period appears to have fallen into a number of categories, the period to the end of 2003 not apparently involving any significant change in the running of activities on the farm. Thereafter matters became more difficult, both by virtue of increasing tensions in the relationship between the husband and wife, and the husband and the son, as well as difficulties arising from market forces to which the husband referred in some detail in evidence in cross examination.
On the evidence before the Court, to regard the post separation period as warranting an adjustment to the contribution entitlements of the parties would not seem justified. To the extent that the husband’s contributions to activities on the farm in that period have been criticised, the Court concludes that, within the context of the difficult relationships which then existed, the husband contributed to the extent that could reasonably have been expected, particularly given the added factor of difficult market conditions. On the other hand, nothing to which the husband has directed the Court in the evidence, establishes that anything in that period should, by virtue of things done by him or not done by the wife and/or the son, elevate his contributions above those of the wife.
To the extent that profits were generated from the sales of seed and are relied upon, there has been a corresponding decline in the stock of seed available for sale in the future. Whilst the potential to generate income from planting crop may have been lost as a result of decisions taken by the husband, the Court cannot reject the husband’s assertions, particularly having regard to the high costs of cropping, as to the net impact of such decision, even with the benefit of hindsight.
It is to be remembered that evaluation of post separation contributions in a case such as this is not a scientific exercise or an audit in which the practical realities of life are ignored. Realistically, in difficult circumstances, each party and the son did the best they could to preserve the asset base. To elevate the contributions of either party relative to the other in those circumstances would not seem justifiable.
SECTION 75(2)
On behalf of the husband a s 75(2) adjustment of 5 per cent was sought. It was submitted that:
The Wife has been at pains in the course of this litigation to draw to the Court’s attention the significant impairment to the Husband’s health as a result of his service in Vietnam and the consequent behavioural symptoms of that illness. (Submissions of Applicant Husband, paragraph 97)
Reference was then made to Dr W’s report of 16 January 2002 (Exhibit H6). It was submitted that:
… as between the Husband and the Wife there is a significant disparity in the health of the two which, in the Husband’s case given his age, is a significant impairment to his ability to take on an income-producing enterprise in the future. (Submissions of Applicant Husband, paragraph 100)
A “second factor” to be taken into consideration was “the nature of the orders sought in these proceedings” (Submissions of Applicant Husband, paragraph 101).
It was submitted that “[e]ven taking into account the impost” under which the wife will receive the farm if she is successful in that regard, the wife “will have the benefit of that income generated from property substantially contributed to by the Husband, which income will be denied the Husband” who will be reliant upon income from investments upon the sum paid to him should the wife’s orders be acceded to.
Senior Counsel for the husband acknowledged that the husband “does have a pension acquired by him by reason of the service in the Defence Forces” (Submissions of Applicant Husband, paragraph 101). It was submitted that whilst the “capital value” of the husband’s pension had been assessed at $96,823.00, such sum was not able to be commuted into a lump sum but was receivable by the husband throughout his life on a periodic basis (paragraph 102). There is no issue that such is the case. It was submitted that the sum must be “considerably discounted in value as a resource to the Husband” (paragraph 102). In a lump sum sense that is true, but its availability as a periodic payment remains to be considered.
It was submitted that:
The Wife obviously regards her association with the Son as a considerable asset to her, which asset she proposes continue to be denied to the Husband. The dysfunctional nature of this family relationship may well be the basis for that aspect, but it is not an aspect which can be denied in considering the relative financial positions of the parties following the determination of this matter. (Submissions of Applicant Husband, paragraph 103)
No authority to which the Court has been referred supports this assertion. The son has his own legal and moral obligations. Whilst the son’s relationship with the wife is not “dysfunctional”, she has no ability to require him to assist her in the future on anything short of a commercial basis.
On behalf of the wife no specific submissions were made with respect to s 75(2). It is reasonably clear (paragraph 46) that the wife’s case was that there should be no s 75(2) adjustment in favour of either party.
As noted earlier, the husband’s health is a potentially significant factor for the purpose of s 75(2). Whilst, with respect to her, the evidence does not establish the wife to have any particular ability to earn income independent of the farm should she be successful in her claim to receive the farm, should she be unsuccessful in her claim to have the farm, it is clear that the wife will have the capacity to generate income for the future from her capital, whatever form that ultimately assumes. Similar observations apply to the husband. Neither appears to have any significant capacity to earn income by personal exertion. Health factors thus impact on earning ability to only a limited extent
The evidence does not establish that after meeting the expenses of running the farm, and the payment of income tax, if successful in her claim to acquire the farm, the wife and/or the son will, after servicing such borrowings as are necessary to pay the husband his entitlement, necessarily be left any better off than the husband would be were he to prudently invest whatever he is awarded as a result of the proceedings. The converse also applies. Although no specific submissions address the topic, it is relevant to be mindful in this context of the likely magnitude of the property, whether in the form of a farm and associated assets or cash, which each party is likely to receive, it being clear beyond doubt that each party will receive between $1,000,000.00, and $2,000,000.00. Absent clear evidence, and the Court has not been directed to any, to establish projected future earnings for either of the parties, the Court is not satisfied that the comparative earning abilities of the parties will be impacted by the determination as to which party is to have the option (which may well not be able to be exercised) of retaining the farm.
On any view of the evidence, each party will have a capacity to maintain a reasonable standard of living, with or without the farm.
The comparative states of health of the parties need to be considered within the context of their ages. Objectively, the evidence does not suggest that, even if his health were not significantly impaired, the husband would have any particular ability to derive income by way of personal exertion. Accepting as the Court has, the husband’s own prior statements for the purpose of obtaining DVA benefits and the acceptance of them by medical experts and in turn DVA, precludes the Court from finding that the husband has the capacity, without considerable assistance from others, to run the farm in the future. Throughout his whole life, interrupted only by the period in which he was serving in the Australian Defence Force, the husband has only ever had employment as a farmer, an avenue which his health suggests to be closed to him, at least in an active physical sense. The wife’s health does not prevent her from exercising such capacity for employment as she may have, albeit no particular capacity in that regard has been established. Their ages and already limited capacity to derive income from personal exertion suggest that little separates the parties.
Relevant to considering the impact of his health is the husband’s entitlement to receive DVA pension benefits which, as he acknowledged, may in fact be increased in the future should he seek to “upgrade” his pension benefits to a higher sum. Whilst, as was submitted by Senior Counsel for the husband, the lump sum value of the husband’s DVA benefits should be discounted, the real measure of the benefits for the purpose of s 75(2) is rather more referrable to the indexed sum which the husband is able to receive on a fortnightly basis, indefinitely, in the absence of any evidence to suggest the likelihood of his entitlement to such payments being curtailed, the probabilities being that, if anything, the entitlement will be increased.
Whilst the husband’s health is inferior to that of the wife, he receives substantial and assured payments because of his state of health and the circumstances in which it came to be impaired. In the light of the factors previously discussed, it is difficult to see on what basis the wife should further compensate him for that.
Whilst it is an exercise of discretion lacking scientific or empirical foundation, to make no adjustment by virtue of s 75(2) would in the circumstances be appropriate.
IMPLICATIONS OF CONCLUSION WITH RESPECT TO ENTITLEMENTS OF HUSBAND AND WIFE.
For reasons the Court has given, a division of the property of the parties in shares of 52 per cent to the husband and 48 per cent to the wife is considered just and equitable. For reasons alluded to by Senior Counsel for the husband in his submissions (paragraph 106 – 115), translating that conclusion into a practical outcome is not without complexity. There is much force in the particular submission of Senior Counsel for the husband that:
In this case, neither party has provided to the Court a precise minute of the orders which they would seek to have made having regard to the evidence (KPMG and [Mr B]) that is before the Court. This is not levelled as a criticism at either of my colleagues but perhaps indicates the difficulties inherent in the concepts which are presented, which difficulties are perhaps exemplified by the reports of both KPMG and [Mr B] referred to. It must be remembered that these reports were created only in the course of the trial. (Submissions of Applicant Husband, paragraph 114)
Whilst the desirability of evidence of the kind referred to by Senior Counsel for the husband (paragraphs 110-111) cannot be disputed, the Court does not accept, in a case such as the present, that such evidence is obligatory. In any event, there is as little foundation for assuming that one party could afford a buy out of the interests of the other as could the other. Absent any clear evidentiary foundation for so concluding, the Court has real reservations as to whether, given the Court’s conclusions as to the entitlements of the husband and wife, either party could realistically expect to be able to finance a buy out of the interest of the other.
The evidence before the Court leaves little room for doubt that neither the husband nor the wife would be able to successfully run the farm without considerable assistance. The evidence, which the Court has accepted, as to the duties performed by the son over the past 18 years, gives some indication of the extent of the assistance required for either party to have any realistic hope of operating the farm successfully.
In the case of the wife, it can reasonably be inferred that the son will continue to be available to perform the duties which he has so competently in the past if she retains the farm. The financial arrangements that the wife would need to make with the son are matters for her, although the entitlement of the son will not be compromised by any orders the Court makes. That is to say, whilst there are a number of contingencies with respect to the outcome of the proceedings as between the husband and the wife, the son’s ability to receive what the Court has concluded his proper entitlement to be, is in no way contingent upon or linked with those matters. If the son chooses not to exercise his legal entitlement, that is a matter for him, but not something which the orders of the Court will force upon him.
The husband cannot be heard to suggest that he could run the farm on his own. To do so would make a mockery of his representations to DVA, the outcome of which has been the receipt of significant and ongoing financial benefits from the public purse. The husband has not given any clear evidence as to the form of outside assistance which he would obtain for the purpose of running the farm, were he to be given the opportunity to do so. It can be inferred with some comfort that the son is unlikely to continue to work on the farm if the husband becomes the owner of it, assuming that the husband would seek that he do so, for which assumption there is no rational basis.
The submission of Senior Counsel for the husband has much to commend it. That proposal suggests that:
Whilst it might be possible to make a provision that the Wife provide the purchase price to the Husband within a defined period, there must, in my submission, then be a default provision that is in the form of either an option to the Husband to purchase and/or a provision for the sale of the property. Each of those default alternatives is available, in my submission, on the application of the Husband. In any case, at this stage of the proceedings, it is submitted that no party is bound by the applications which they make as to the form of the orders which might be made. (Submissions of Applicant Husband, paragraph 113)
On balance, the Court is persuaded that the first option to purchase should be granted to the wife on strict terms as to time, in default of such option being exercised, at the election of the husband the property proceed to sale with a percentage division of the proceeds of sale in the event of the husband not exercising the second option to purchase the wife’s interest in the property, or being unable to do so in accordance with the terms of such option. The terms of any options would themselves be open to debate.
How the matters referred to in the expert’s report identified by Senior Counsel for the husband ought properly impact in each of the three scenarios which potentially arise ought be the subject of further submissions, no one having addressed the matters which, as Senior Counsel for the husband fairly suggested, arose during the course of the trial and which have the potential to put both the husband and wife at risk. The Court accordingly will make orders to permit the course suggested by Senior Counsel for the husband to be implemented.
CONCLUSION
Mindful of the limited ability of the Court, once orders for settlement of property are made, to make further orders other than by way of implementation, the Court proposes making only two substantive orders at this time, largely for reasons referred to in the preceding paragraphs of these reasons. The orders which the Court will make will provide for the entitlement of the son, G Cuneo, in the sum of $65,253.00 together with interest thereon as and from 1 April 2006 in accordance with the interest provisions of the Family Law Rules 2004 to crystallise, and provide that payment of such sum, together with interest accrued thereon be charged upon the assets of the parties of the husband and wife until the whole of such sum together with accrued interest has been paid in full.
The parties should henceforth hold the property of the marriage as found by the Court and as tenants in common in shares of 52 per cent to the husband and 48 per cent to the wife, to the extent that such an outcome is possible, as it is to only a limited extent without further orders. The parties should be able to make further submissions in writing as to the implementation of the Court’s conclusion as to the beneficial entitlements of the parties to the property of the marriage.
The matter having been prolonged, due in part to its complexity, in part to the trial not concluding in Cairns during the allotted hearing dates and consequential need for written submissions and in part due to the Christmas vacation, the Court will proceed to make orders implementing the orders to which reference has been made in the absence of written submissions within 28 days or such longer period as all parties consent to for the purpose of making such submissions.
ORDERS
The orders of the Court are accordingly:
1. That the parties forthwith pay to their son, [G Cuneo], the sum of $65,253.00 together with interest thereon as and from 1 April 2006 in accordance with the interest provisions of the Family Law Rules 2004, payment of such sum, together with interest accrued thereon being charged upon the assets of the parties of the husband and wife until the whole of such sum together with accrued interest has been paid in full.
2. That the parties do henceforth hold the property of the parties to the marriage as found in these reasons for judgment as tenants in common in shares of 52 per cent to the husband and 48 per cent to the wife.
3. That, within 28 days, any party make further submissions in writing as to the implementation of the preceding order.
4. That the costs of all parties be reserved until final orders for the implementation of these orders have been made.
I certify that these 112 pages are a true copy of the Reasons for Judgment herein of
I.R. Coleman J.
Associate A.C.
Date:17/03/2006
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