Derry and Lopez

FAMILY COURT OF AUSTRALIA

DERRY & LOPEZ

[2011] FamCA 444

FAMILY LAW - PROPERTY – assets and liabilities to be included in the pool – add backs.

FAMILY LAW - PROPERTY SETTLEMENT – order made by consent granting husband leave to file application out of time – parties failed to comply with orders to prepare matter for hearing – court’s valuable time wasted – farming property acquisitions – failed business ventures – both parties claim to be suffering ill-health – agreement between the parties that respective contributions be assessed as being equal – husband in defacto relationship – each party has capacity for appropriate gainful employment – no relevant financial resources of either party to be taken into account – wife seeks adjustment of 10% in her favour on account of s 75(2) factors – husband says no adjustment should be made – found that although disparity in income and earning capacity of parties no adjustment warranted – net assets to be divided equally between the parties – just and equitable.

FAMILY LAW - SPOUSAL MAINTENANCE – wife filed Response seeking orders for spousal maintenance – husband filed Reply seeking dismissal of the application – wife did not pursue application – application dismissed.

Family Law Act 1975 (Cth) ss 72, 74, 75 & 79

JEL and DDF (2001) FLC 93-075
Kowaliw and Kowaliw (1981) FLC 91-092 at 76,645
Omacini and Omacini (2005) FLC 93-218 at 79,617-79,618
Phillips and Phillips (2002) FLC 93-104
Waters and Jurek (1995) FLC 92-635

APPLICANT:

Mr Derry

RESPONDENT:

Ms Lopez

FILE NUMBER:

ADC

5638

2007

DATE DELIVERED:

13 May 2011

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Strickland J

HEARING DATE:

2 March 2009
8 April 2009
12 May 2009
11 June 2009
19 June 2009
22 & 23 October 2009
18 November 2009
8 & 9 February 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr R Richards

SOLICITORS FOR THE APPLICANT:

Scales & Partners

COUNSEL FOR THE RESPONDENT:

Mr A Jordan

SOLICITOR FOR THE RESPONDENT:

David M Davidson

Orders

Within six [6] weeks of the date hereof the husband pay to the Trust Account of the solicitors for the wife on behalf of the wife the sum of $764,466.
Contemporaneously with the said payment:
(a)The wife resign from all offices that she may hold in Derry Nominees Pty Ltd and transfer to the husband her shares in that company.
(b)The wife transfer or assign to the husband any loan account that she has in Derry Nominees Pty Ltd and/or the Derry Family Trust.
(c)The wife relinquish any further interest or entitlement she may have in the said company or the said Trust.
(d)The husband indemnify the wife and keep her indemnified against all debts and liabilities of the said Company and the said Trust (including any debit loan account of the wife therein).
The husband be solely responsible for either paying and discharging or ensuring that the said Family Trust pays and discharges all repayments as and when they fall due pursuant to the Bank SA FDA secured over the titles to the farming properties at Farm 1, Farm 2 and Farm 3, and the husband indemnify the wife and keep her indemnified against any liability pursuant to the said Bank SA FDA.
Contemporaneously with the said payment:
(a)The wife transfer to the husband all that her estate and interest in the properties situated at:
(i)… K Street Town 1 in the State of Queensland;
(ii)… L Street Town 1 in the State of Queensland;
(iii)… B Street Town 2 in the State of Queensland.
(b)The husband transfer to the wife all that his estate and interest in the properties situated at:
(i)… E Street Brisbane Suburb 1 in the State of Queensland;
(ii)… V Street Brisbane Suburb 2 in the State of Queensland.
(c)The husband and the wife do all things necessary to equally discharge the Bank SA Portfolio Loan Account secured over the titles to the said properties in the State of Queensland.
The partnership Mr & Ms Derry Partners be dissolved effective as at 30 June 2011.
The wife forthwith transfer or assign to the husband all her estate and interest in the following items of property:
(a)The joint Elders Risk Management Account.
(b)The farm machinery.
(c)The Nissan Utility.
The husband forthwith transfer or assign to the wife all his estate and interest in the following items of property:
(a)The Ms Lopez Farm Account.
(b)The Holden Commodore.
The credit balance of the Bank SA Business Maximiser Account held in the joint names of the parties be divided equally between them.
The husband do forthwith transfer or assign to the wife any AMP Insurance Policy that he owns on the life of the wife.
The husband have as his sole property absolutely free of any claim, right, interest, demand or entitlement of the wife the following:
(a)The properties at … K Street Town 1, … L Street Town 1 and … B Street Town 2.
(b)The Elders Risk Management Account.
(c)All monies, shares, and precious metals received by the husband pursuant to the order made on 4 December 2008 and any agreement made between the parties.
(d)The farm machinery.
(e)The Nissan Utility.
(f)All shares purchased by the husband since the separation of the parties.
(g)All drawings made by the husband from the accounts of the said partnership.
(h)The husband’s superannuation entitlements in the Mr Derry Superannuation Fund.
(i)All items of household furniture and effect currently in the possession or control of the husband.
(j)All other items of personalty currently in the possession or control of the husband.
The wife have as her sole property absolutely free of any claim, right, interest, demand or entitlement of the husband the following:
(a)The properties at … E Street Brisbane Suburb 1 and … V Street Brisbane Suburb 2.
(b)The Holden Commodore motor vehicle.
(c)The Ms Lopez Business Account.
(d)The Ms Lopez Farm Account.
(e)All monies, shares, and precious metals received by her pursuant to the order made on 4 December 2008 and any agreement made between the parties.
(f)The wife’s superannuation entitlements.
(g)All items of household furniture and effects currently in the possession or control of the wife.
(h)All other items of personalty currently in the possession or control of the wife.
Each party shall do all such acts and sign all such documents as shall be necessary to give full force and effect to this order.
If either the husband or the wife shall refuse or neglect to execute any document necessary to give effect to the terms of this order within seven [7] days after the same shall have been tendered to him or her for that purpose then and in such case a Registrar or Deputy Registrar of the Family Court upon proof by affidavit of such refusal or neglect is hereby appointed to execute on behalf of either party and if in his or her opinion it shall be necessary so to do to settle the same and to do all such other acts and things and execute all such other documents as shall be necessary to give full force and effect hereto and shall execute and do the same accordingly.
In the event of default by the husband in payment of the sum referred to in paragraph one [1] hereof or any part thereof:
(a)The husband shall pay to the wife in addition to such sum interest upon the amount unpaid calculated at the rate prescribed by the Family Law Rules from the date of default to the date of payment of such sum; and
(b)Should such default continue for a period of twenty-eight [28] days then and in that event the said farming properties at Farm 1 and Farm 2 be sold on such terms and conditions and for such price as the parties may agree and in default of agreement as determined by this Honourable Court, and from the net proceeds of sale the wife receive such sum as shall then be outstanding pursuant to these orders (including the interest due pursuant to sub-paragraph (a) hereof) and the husband receive the balance.
All applications and responses including the wife’s application for spousal maintenance be dismissed and removed from the active pending cases.
Each party have liberty to speak to these orders.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 5638 of 2007

Mr Derry

Applicant

And

Ms Lopez

Respondent

REASONS FOR JUDGMENT

Introduction

I have before me for determination competing applications for property settlement.
The orders sought by the parties changed over time and I will not set out the various iterations of the same. Suffice to say the husband commenced these proceedings by filing an Application for Final Orders for property settlement on 31 October 2007. He was out of time with this application but on 6 December 2007 an order was made by consent granting him leave to file his application. The wife then filed her Response on 21 February 2008 and the husband filed a Reply on 5 March 2008. That Reply sought dismissal of the application for spousal maintenance set out in the Response. In the end result the wife did not pursue that application and I will dismiss it as part of the orders that I make.
This case was bedevilled by the parties failing to comply with orders to prepare the matter for hearing and taking their own good time to address valuations of certain assets, discovery and production of documents, and the filing of affidavits of evidence-in-chief.
The first day of trial took place on 2 March 2009, and I only need to refer to the extensive orders that I had to make on that day to indicate how ill-prepared both parties were at that time. I was required to make orders for valuations to be obtained, for discovery and production of documents, for medical reports to be obtained, for minutes of orders sought to be prepared, exchanged and filed, and for subpoenae to issue.
An initial continuation hearing was set for 8 April 2009, but further hearings had to be held on 12 May 2009, 11 June 2009, and 19 June 2009 in order to have the parties address all of the outstanding issues.
On 19 June 2009 I listed the case for final hearing on 22 and 23 October 2009, and made further orders including for the filing of affidavits of evidence-in-chief.
The hearing commenced on 22 October 2009 but it soon became apparent that the parties were still not ready for a final hearing. The wife also changed her instructions to her solicitor on the morning of the first day of the hearing and that led to an alteration in the orders sought. Each party presented case outlines which indicated there was no longer agreement about various of the figures, including in particular those which had been the subject of the previous joint balance sheet. This difficulty was then compounded by the circumstance that neither party had then obtained valuations of the disputed items, nor obtained or had available relevant documentation. There was even a lack of evidence as to simple issues such as current bank account balances.
In addition, neither party had properly set out in their affidavits of evidence-in-chief their respective cases as to the significant issues that were left in dispute. Nor had they complied with orders for the obtaining of all medical reports in support of their respective claims of ill-health. Nor had they thought to obtain accurate figures as to the assets and superannuation entitlements which had been divided between them pursuant to a partial property settlement order including a splitting order made by consent on 4 December 2008.
In these circumstances I continued the hearing as best I could over the two days available, and then I listed the case for a directions hearing on 17 November 2009 to determine what further orders were necessary to ensure that the case was completely ready to proceed to finalisation. In fact, that hearing took place on 18 November 2009 and I made orders for affidavits to be filed specifying the topics to be addressed, and for a joint balance sheet to be prepared and filed. I then set the hearing to resume on 4 February 2010 with a time estimate of two days. Subsequently that was changed to commence on 8 February 2010.
Prior to the resumption of the hearing the wife filed a lengthy affidavit in which she attempted to address the specific topics, but she went further and included material which was not only inadmissible but which raised then dealt with topics not identified in the order. The husband also filed a further affidavit but fortunately this affidavit did comply with my specific order.
Significantly, the parties ignored my order for a finalised joint balance sheet to be prepared and filed, but the husband did file one prepared without any input from the wife or her solicitor. Ultimately this balance sheet was used by both parties, but not without having to first overcome a number of difficulties.
The further topics raised in the wife’s affidavit and the lack of a joint balance sheet caused further delay in finalising this matter.
The orders for property settlement ultimately sought by the husband were in summary as follows:
13.1.That the wife’s interest in the farming properties at Farm 1, Farm 2 and Farm 3 be transferred to him.
13.2.
That the husband transfer to the wife his interest in the properties at

E Street Brisbane Suburb 1 and V Street Brisbane Suburb 2.
13.3.That if there is to be an equal division of the property of the parties then the wife transfer to the husband her interest in the properties at K Street Town 1, L Street Town 1 and B Street Town 2 and there be no adjustment for capital gains tax, but if there is a different percentage division, and on the basis that the wife does not seek to have these properties, they are to be sold over a total period of three years (one property each year) and the proceeds of sale divided between the parties with any capital gains tax being met by each party in accordance with their respective percentage entitlements.
13.4.That the husband retain the Elders Risk Management Account.
13.5.That each party retain the proceeds received by each of them from the Macquarie CMT Account.
13.6.That the balance of the Bank SA Business Maximiser Account be divided equally between the parties and that each be responsible for any tax payable on their respective shares.
13.7.That the husband retain the farm machinery.
13.8.That the wife retain the Holden Commodore motor vehicle.
13.9.That the husband retain the Nissan Utility.
13.10.That the parties retain the assets and superannuation entitlements each received pursuant to the partial property settlement order including the splitting order made on 4 December 2008.
13.11.That the husband retain his shares purchased post separation.
13.12.That the wife retain the Ms Lopez Business Account.
13.13.That if there is a current AMP policy owned by the husband on the life of the wife the husband do assign that policy to the wife.
13.14.That the Bank SA Portfolio Account be paid out but subject to the precise details being clarified depending on who retains which Queensland properties.
13.15.That with the Bank SA FDA, if the husband retains all of the farming properties he take over responsibility for this liability, but if the wife retains one of these properties then the liability be paid out accordingly.
With the wife, again in summary, she sought the following orders:
14.1.That the wife transfer to the husband her interest in the Farm 1 and Farm 3 farming properties, K Street Town 1, L Street Town 1, and B Street Town 2.
14.2.That the husband transfer to the wife his interest in the Farm 2 farming property, E Street Brisbane Suburb 1, and V Street Brisbane Suburb 2.
14.3.That the husband retain the Elders Risk Management Account.
14.4.That each party retain the proceeds received by each of them from the Macquarie CMT Account, the assets and superannuation entitlements received by each of them pursuant to the partial property settlement order including the splitting order made on 4 December 2008, and other amounts received by each of them by agreement.
14.5.That the husband retain the farming machinery.
14.6.That the wife retain the Holden Commodore motor vehicle.
14.7.That the husband retain the Nissan Utility.
14.8.That the husband retain his shares purchased post-separation.
14.9.That the wife retain the Ms Lopez Business Account.
14.10.That if there is a current AMP Policy owned by the husband on the life of the wife the husband to assign this policy to the wife.
14.11.That the parties be responsible for the Bank SA Portfolio Account and the Bank SA FDA according to which properties they each retain and the percentage division applied.
14.12.That there be an adjustment overall such that the wife receive 60% of the net asset pool and the husband 40%.
I note that both parties seek an order that their partnership Mr & Ms Derry Partners be dissolved.
Although there was almost no evidence about this and the parties seemed to simply ignore the fact, the farming properties are apparently owned by

Derry Nominees Pty Ltd as trustee for the Derry Family Trust. Thus it is not open to the Court to transfer an alleged interest of one party in those properties to the other. In incomplete minutes of order handed up by the husband’s counsel at one stage the husband did seek that the wife resign from any office that she holds in the trustee company and transfer her shares to the husband, but nothing more was said about this when it came to final addresses. In these circumstances I will have to do the best I can with the limited evidence and the limited options that have been presented to me.
I observe that in paragraph 71 of the husband’s affidavit of evidence-in-chief filed on 20 July 2009 he requested that the wife make available to him for the purpose of copying some of the “family photos and holiday prints she removed from the home”, and he sought “the return of all books and farming records, black bean chest of drawers, grandma chest of drawers and piano” alleging they were “inherited or gifted” to him by his family. However, there is no application for an order in these terms and the only other mention of this was a brief reference by the husband’s counsel during the hearing of the husband seeking “heirlooms”. It was not raised again and thus I do not propose to do anything about these matters. In any event, I note that the common position of the parties was that the furniture and household effects have been divided and they were not to be included in the asset pool.
As can be seen there are a number of “ifs, buts and maybes” in how each party presents their case. Importantly, the wife’s counsel indicated in his final address that a minute of order would be presented to the court addressing the dissolution of the partnership and how the liabilities should be borne. I note that no minute of order has been presented and given the history of this case I am tempted again to simply leave the parties to work these issues out. However, on reflection I will give the parties liberty to speak to the orders before putting them in place.

Factual Background

The husband was born in 1951 and is now aged 59 years.
The wife was born in 1953 and is now aged 57 years.
In 1970 the husband completed a Diploma at Educational Institution 1.
In 1971 the husband became a partner in a farming partnership with his parents, known as Partnership 1. The partnership ran sheep and cattle and produced cereal on two properties, Farm 1 and Farm 2.

In 1973 the wife completed a Diploma at Educational Institution 2.
In 1974 the wife commenced employment in the education field at Location 1 where the parties met.
In 1977 the parties became engaged.
On 18 March 1978 the parties married and commenced cohabitation in a renovated cottage on the farming property at Farm 2. The wife ceased working in the education field at this time.
In 1978 the parties’ first child J was born and is now aged 32 years.
In about 1980 the parties through the company Derry Nominees Pty Ltd, the corporate trustee of the Derry Family Trust purchased the farming property at Farm 2 for $150,000 from the husband’s parents who provided an interest free loan to facilitate that purchase. Repayment was to be made at the rate of $10,000 per annum, and the parties commenced Mr & Ms Derry Partners.
In 1981 the parties’ second child M was born and is now aged 29 years.
In 1983 the parties’ third child S was born and is now aged 28 years.
On 7 December 1983 the parties purchased the farming property known as Farm 3 at Town 3 through Derry Nominees Pty Ltd. They borrowed $70,000 to complete this purchase.
In 1985 the parties’ fourth child K was born and is now aged 25 years.
In November 1985 the husband’s parents retired.
In 1987 the parties purchased the property known as Farm 1 from the husband’s parents for $600,000, again through an interest free loan. The total repayments became $20,000 per year for both Farm 2 and Farm 1. The parties moved to live on the Farm 1 property.
In 1987 the parties received $200,000 from the South Australian Government pursuant to a heritage agreement whereby 5,000 acres of Farm 3 was set aside.
In 1991 the wife started her own retail business called “Business 1”, working from home.
In 1992 the repayments to the husband’s parents were increased to $30,000 per year, but because of poor seasons thereafter differing amounts were repaid at various times, and later the husband’s parents forgave the balance of the parties’ debt.
In 1992 and 1993 the wife worked part-time in the education field.
In 1993 the husband purchased additional land at Town 4 for about $40,000. This land was sold approximately three years later.
In 1994 the husband commenced futures trading in the joint names of the parties.
In 1995 the wife worked as a relief employment in the education field at Location 1.
In 1996 the parties leased a further 3,000 acres nearby to extend their cropping program to 7,000 acres.
In about 1998 the wife’s retail business ceased.
In September 1999 the parties purchased an investment property at unit

… V Street, Brisbane Suburb 2, Queensland for $156,000.
In 1999 the parties invested $129,000 in a fishery business. This business failed and the parties lost $107,000 of their initial investment.
In January 2000 the parties ceased their farming operations and leased out the farming properties, save and except for the Farm 1 homestead.
In January 2001 the parties purchased an investment property at unit

… E Street, Brisbane Suburb 1, Queensland for $170,780.
In September 2001 the wife rented a home in Town 5 to accommodate the children’s schooling. The wife had purchased a health care business in Town 5 for $20,000 and she commenced to operate that business.
Also in September 2001 the parties invested $61,200 in a joint venture program in Sydney to build a block of apartments in Sydney Suburb 1. They borrowed $80,000 from Bank SA to fund this investment. However, the project did not proceed and the parties lost approximately $8,500.
In February 2002 the husband joined the wife and children in Town 5.
In May 2003 the parties purchased the following properties:
·    B Street, Town 2 for $130,000
·    R Street, Town 2 for $155,000
·    L Street, Town 1 for $153,500
·    K Street, Town 1 for $150,000
·    C Street, Town 1 for $185,000
In November 2003 the husband suffered burns, shrapnel injuries and eardrum damage in an accident at Farm 1.
Between 2000 and 2004 the husband undertook contract harvesting, and in effect operated the futures trading as a business. In the 2000 financial year there was a loss of $22,782 from this trading, in the 2001 financial year there was a loss of $489, in the 2002 financial year there was a profit of $16,063, in the 2003 financial year the parties suffered a loss of $66,000 as a result of selling futures in the share price index as a hedge to maintain the value of their shares, which was successful, and in the 2004 financial year there was a loss of $20,256.
In 2004 the parties sold their Company 1 shares for $32,000.
On 9 June 2004 the parties separated.
The wife asserts that after separation the husband moved to Town 6 and commenced a relationship with Ms L. The husband says that cohabitation with Ms L commenced in 2005.
The husband obtained employment in construction in Town 6.
In September 2004 the wife sold BHP shares for $52,298. She retained $10,000 of these proceeds and paid the balance into the partnership account to meet farming expenses.
In 2006 the husband commenced working for Ms L’s business, Business 2.
On 11 July 2006 a Divorce Order was granted.
In May 2007 the wife ceased operating her health care business in Town 5.
In May 2007 the wife sold 41,674 Company 2 shares for $350,557 without informing the husband. She deposited this money into her bank accounts.
On 31 July 2007 the wife froze the farming cheque account and opened a new account in her name.
On 31 October 2007 the husband filed an Application for Final Orders for Property Settlement.
On 6 December 2007 an order was made by consent granting leave to the husband to file his Application for Property Settlement pursuant to s 44(3) of the Family Law Act 1975 (Cth).
On 21 February 2008 the wife filed a Response.
On 26 February 2008 the sale of the property at R Street Town 2 settled and the net proceeds of sale of $297,131 were paid to Bank SA to reduce the mortgage.
On 5 March 2008 the husband filed a Reply.
On 12 June 2008 the sale of C Street Town 1 was settled and the net proceeds of sale of $382,910 were again paid to Bank SA to reduce the mortgage.
On 4 December 2008 the following consent orders were made:
NOTING
A.     That the parties have reached an interim agreement as to the partition of certain assets;
B.     That the [Derry] Super Fund ABN […] is a self-managed superannuation fund listed on the Register of Complying Superannuation Funds held with Australian Taxation Office;
C.     That the husband and the wife are the only members of the [Derry] Super Fund and that their respective interests are splittable interests;
D.     That the husband and the wife are the trustees of the [Derry] Super Fund.
E.      That the assets of the [Derry] Super Fund comprise shares, gold and silver bullion, and cash at bank;
F.      That the accounts of the [Derry] Super Fund as at 30/6/07 show member entitlements in the sum of $814,283, the account balance of the husband being $401,474.49 and the account balance of the wife being $412,808.77;
G.     That the parties have agreed by way of interim settlement of property to equalise their entitlements in the [Derry] Super Fund and to divide the assets of the fund in specie and to cause and permit the wife to rollover her entitlement to a fund of her own choice the parties sharing in equal proportions any liability to the Australian Taxation Office arising from the operation of the fund and arising from the terms of this order;
H.     That the husband and the wife are the only members of the partnership styled [Mr & Ms Derry Partners];
I.       That the assets of the said partnership include shares, bullion, and funds invested with Macquarie Bank (in the sum of $16,000 or thereabouts);
J.      That the parties have agreed to divide some of the assets of the said partnership equally between them (in specie as to shares and bullion).
K.     That the parties have agreed to distribute 17,475 [Company 3] shares held by the said partnership between their children in unequal proportions particularly as to [M] 6,291 shares, as to [S] 5,825 shares, and as to [K] 5,359 shares contemporaneously with the division of assets referred to in paragraph J above.
BY CONSENT IT IS ORDERED:
1.      That by way of interim or partial settlement of property or alteration of interests in property:
As to the [Derry] Superannuation Fund
(a)in accordance with Section MT(1)(b) [sic] of the Family Law Act, 1975 as amended:
(i)the wife is entitled to the specified interest, being 50% of each splittable payment made out of the husband’s interest in the [Derry] Superannuation Fund (hereinafter referred to as “the fund”);
(ii)the husband’s entitlement is correspondingly reduced;
(iii)the husband is entitled to the specified interest, being 50% of each splittable payment made out of the wife’s interest in the fund;
(iv)the wife’s entitlement is correspondingly reduced;
(b)paragraph (a) has effect from the operative time;
(c)the operative time is the date of the division of assets in specie;
(d)the husband and the wife as the trustees of the fund do all such things and acts and sign all documents as may be necessary to:
(i)calculate in accordance with the requirements of the Family Law Act the entitlements created in paragraph (a) above;
(ii)pay the entitlements whenever a splittable interest becomes payable;
(e)the wife will exercise her election pursuant to regulation 7A.06 of the Superannuation Industry Supervision Regulations 1994 to transfer the transferable benefit allocated to her pursuant to this order to a new fund of her choosing;
(f)upon compliance with the provisions of this order the wife do resign as a trustee.
As to the partnership [Mr & Ms Derry Partners]
(g)the husband and the wife do forthwith do all acts and things to divide in specie the following property of the partnership styled [Mr & Ms Derry Partners] (hereinafter referred to as “the partnership”)
(i)all shares in public companies;
(ii)the sum presently held in Macquarie Bank account no. […] being the sum of $15,000 or thereabouts;
(iii)gold bullion; and
(iv)silver bullion
Liberty to either party to apply for consequential orders.
On 4 March 2009 the parties distributed the partnership shares, the partnership accounts, and the silver and gold bullion in specie, and the assets of the Derry Superannuation Fund were split equally between the parties.

The current circumstances of the parties

The husband

The husband is in a defacto relationship with Ms L. They live together in rented accommodation in Town 6. Ms L operates her own professional practice in Town 6 and in Town 7. The husband works as an office worker in that practice and earns $40,000 gross per year. He is also studying for a Certificate qualification in that field by correspondence and at the time of the hearing he was one quarter the way through the course.
Together, the husband and Ms L own a block of land in Town 6 which is subject to a mortgage for the full purchase price.
Ms L also owns a property in Town 6 which is being renovated by her and the husband.
The husband claims to be in poor health suffering from “uncontrolled atrial fibrillation” which requires surgery, namely an ablation procedure. He was due to have that procedure in January 2010 but it was postponed until March 2010. He also suffers from coeliac disease and claims to have depression.
The husband leases land from the local council for $250 per year. Eventually he hopes to put a shed on that property to house Sport 1 equipment.

The wife

The wife lives in rented accommodation in Town 5. She does not work and lives off her share of the partnership income.
The wife is qualified in the education field and she is entitled to be registered and accept employment with the relevant professional body.
The wife too claims to be suffering ill-health. In particular she suffers from depression and anxiety and has a very mild right carpal tunnel syndrome.
I observe that all of the children of the marriage are adult and none of them are dependent upon the parties.

The issues in dispute

It must be said that given the parties’ woeful preparation for the hearing, as the case progressed and they each became aware of not only what their own case was but also each other’s case, a number of issues that were there at the start dissipated. This resulted in an enormous waste of valuable court time and put each of the parties to significant unnecessary cost.
A prime example of this is the wife’s allegation that the husband had lost in excess of $300,000 in futures trading. It was not until the resumed hearing in February 2010 that it was demonstrated comprehensively that the wife was wrong and she was obliged to retract this allegation.
In any event, in relation to the asset pool there were still two issues left in dispute between the parties, namely as follows:
83.1.What of the drawings that each party made from the partnership accounts and the sale of shares subsequent to separation should be notionally added back to the asset pool.
83.2.Whether any of the money paid by the husband to his parents since 1992 allegedly in repayment of a loan should be notionally added back to the asset pool.
In relation to the respective contributions of the parties, as with everything in this case, it took a long time to reach this point, but by the time of final addresses both parties were saying that the contributions were equal.
With the relevant s 75(2) factors the husband’s case is that although there are relevant factors on both sides there should be no adjustment. His alleged ill-health and the impact on his future earning capacity offsets any factor favouring the wife as does the amount of property that she will receive from these proceedings. The wife says though that because of the disparity in the income and the property of the parties, and particularly taking into account the secure financial position of the husband and his defacto partner as a family unit compared to her position there should be a 10% adjustment in her favour.
The issues don’t stop there though, the parties are in heated disagreement as to whether the husband should have all three farming properties or whether the wife should have one, namely the property at Farm 2.
There is also an issue about the Queensland properties. The husband only seeks to have the properties at K Street Town 1, L Street Town 1 and B Street Town 2 if the overall percentage division is determined to be equal, but if not, then he seeks that these properties be sold. The wife’s case though is that the husband should be required to take these properties regardless given that that was his position until the final hearing in this matter, and she would have to sell the properties at E Street Brisbane Suburb 1 and V Street Brisbane Suburb 2 to pay for her share of the capital gains tax that would be assessed on the sale proceeds of the other three properties.

The principles to be applied to the matters before the court

The provisions of s 79 of the Family Law Act 1975 define the court's power and obligations in determining applications for property settlement. The court has a discretion to make orders altering the interests of parties in property, provided the court is satisfied that such orders are appropriate, just and equitable.
The court is obliged by the provisions of s 79(4) of the Act to take into account the following matters:
89.1The financial and non-financial contributions made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them (sub-paragraph (a) and (b));
89.2The contribution made by a party to the marriage to the welfare of the family, including any contribution made in the capacity of homemaker or parent (sub-paragraph (c));
89.3The effect of any proposed order upon the earning capacity of either party to the marriage (sub-paragraph (d));
89.4The matters referred to in s 75(2) so far as they are relevant (sub-paragraph (e));
89.5Any other order made under the Act affecting a party to a marriage or a child of the marriage (sub-paragraph (f));
89.6Any child support payable (sub-paragraph (g)).
Accordingly, in assessing the entitlement of each of the parties for property settlement, there is both a retrospective element relating to the contributions of each of the parties and a prospective element relating to matters referred to in s 75(2).
According to guidelines established through a series of leading decisions, the Court should determine the following matters on the evidence, that is:

91.1Firstly, the Court must determine the assets, liabilities and financial resources of the parties to the marriage.
91.2Secondly, the Court must consider all relevant contributions of each of the parties, and, where possible, the court should assign an entitlement of each of the parties arising as a result of those contributions.
91.3Thirdly, the Court should then consider the prospective components of the claims of each of the parties arising as a result of the provisions of s 75(2). The Court should then identify what alteration, if any, should be made to the entitlement of each of the parties earlier assessed on account of contributions having regard to the relevant s 75(2) factors.
91.4Fourthly, the Court takes a step back and considers whether the proposed orders are just and equitable.

The Evidence

The husband was represented by Mr Whittle initially and then Mr Richards. The husband relied on his financial questionnaire filed on 26 February 2009, his affidavits filed on 20 July 2009 and 20 January 2010 and his financial statement filed on 20 July 2009. He gave evidence and was cross-examined.
In addition the husband relied on the financial statement of his defacto partner filed on 20 July 2009. She also gave evidence and was cross-examined. Further, the husband relied upon the affidavits of his solicitor Ms Davies filed on 20 July 2009 and 13 October 2009 annexing medical reports from the husband’s general practitioner, Dr C. Dr C gave evidence by telephone link and was cross-examined. Finally, the husband relied on the further affidavit of his solicitor Ms Davies filed on 11 November 2009 which annexed the medical report of the husband’s cardiologist, Dr H dated 20 October 2009. Dr H was not required for cross-examination.
The wife was represented by Mr Jordan. She relied on her financial questionnaire filed on 26 February 2009, her affidavits filed on 28 July 2009 and 17 December 2009, and her financial statement filed on 26 February 2009. She gave evidence and was cross-examined.
The wife also relied on the affidavit of her solicitor, Mr Jordan filed on

29 July 2009 annexing medical reports from her general practitioner Dr M and a clinical psychologist Ms S. Neither of the authors of these reports were required for cross-examination.
Save and except in three respects the husband gave his evidence well. Those three areas were his evidence as to his heart condition, parts of his evidence as to his parent’s loan, and parts of his evidence as to the need to retain all three farming properties.
In relation to his health, there is no doubt that he has a heart condition known as atrial fibrillation. That is a condition which causes fast heart rates and the symptoms are dizziness, light-headedness, chest discomfort and shortness of breath. He has consulted with his general practitioner and his cardiologist about this condition, and to repeat, he was due to have a surgical procedure to attempt to overcome the condition in March 2010.
The husband’s case was that this condition affected his ability to work, and it severely curtailed his lifestyle. However, I reject these claims.
The husband’s evidence as to this became quite farcical when it was revealed that this heart condition was first diagnosed when he was 40, and for all of the time since he has worked mostly full-time, and always enjoyed an active and busy lifestyle. Indeed, of recent times he has travelled extensively including overseas, he regularly and frequently enjoys long bike rides, he drives his vehicle long distances, he engages in Sport 1, he has actively maintained and renovated properties, he has engaged in snow skiing, he has crossed the Simpson Desert in a four wheel drive, and he regularly walks long distances.

I also observe that nothing in the report of his cardiologist Dr H indicated that the condition affected his ability to work, what it did say though is that “Mr [Derry] is not keen on full-time employment at the moment”.
The husband also obtained reports from his general practitioner, Dr C, and to repeat, she gave oral evidence as well. However, I find her evidence to be unimpressive and unreliable. To use the vernacular, she was nothing more than a barracker. In cross-examination she revealed that she was a good friend of the husband’s defacto partner, that she was the godmother of one of her children, and she saw the husband and Ms L socially.
Dr C’s manner of giving evidence was to generally answer a question with a question, and she attempted to engage the cross-examiner in a battle of wits using sarcasm as a defensive measure. In between times she did speak of the husband’s heart condition, his depression and his coeliac disease, and how they affect his ability to work. However, on the basis of her evidence I do not accept that the husband cannot continue working as an office worker well into the foreseeable future. Even she conceded that if he manages himself properly then he can work.
In relation to his parent’s loan, his initial evidence (e.g., in paragraph 13 of his affidavit of evidence-in-chief) was that there was no repayment made after 1992, and then some time later the loan was forgiven. He further said that the principal amount outstanding at that time was $330,000. In cross-examination he confirmed this evidence, but was unclear as to precisely when the forgiveness occurred. However, when confronted with Exhibit W6 which was a schedule of payments made to his parents and which demonstrated that a total of $170,000 (by way of interest payments) was paid to the parents after 1992 and up to 2004, the husband’s evidence became that he had put in the wrong date for when payment ceased and that the loan was in fact forgiven in or about 2004.
He then gave as his reason for putting in the wrong date that he did not have access to the bank records and the accounts generally because after separation the wife took over the running of the partnership and retained all of the records.
For the wife’s part she did not dispute that the loan was now forgiven, but she claimed that the husband had siphoned off the $170,000 to his parents and he would get that back after this case was concluded. Thus, she sought that that amount be notionally added back to the asset pool.
Now, although the husband’s evidence on this topic was poor, I accept that he did get the date wrong and there has not been any siphoning off of funds. Firstly, the husband knew that the wife had all the records, secondly, the accounts of the Family Trust continued to show the loan outstanding, albeit it was shown as $315,300 rather than $330,000, and it was still in the accounts as at the end of the 2008/2009 financial year, and thirdly, all the “further” repayments were made between 1992 and 2004, namely before separation, and thus they could not have anything to do with these proceedings.
In relation to the husband’s evidence as to why he should be able to retain the three farming properties, certain aspects of that evidence were less than convincing. In particular, I refer to his claim that he wants to keep the farm intact in the event that one or other of the adult children were to return to take up farming. I find that claim is simply nonsense. The eldest child is working in construction overseas, the next eldest is a professional, the third child is studying in the medical field at university, and the youngest is living overseas. None of these children have shown any inclination to take up farming.
Despite my concerns about the husband’s evidence on these three topics, I was impressed with his evidence on other major topics. For example, he was able to demonstrate how wrong the wife was about the futures trading losses, and his evidence as to his drawings from the partnership accounts was persuasive. He started off on the wrong foot though in relation to the movement of money by the wife into and out of various accounts. He alleged that on his calculations there was a significant amount that was available to the wife which was unaccounted for. Initially his evidence in this regard was extremely confused and as it turned out, inaccurate. He persisted though and presented a further schedule in an aide memoir that was said to demonstrate that the wife had failed to account for a net amount of $149,000. The husband then sought that that amount be notionally added back to the asset pool. However, once all of the documentation was available, it became apparent that this approach was unhelpful, and that the appropriate approach was to address the drawings that each party had made from the partnership accounts and identify what was for personal use and what was for business use.
In effect, both parties commenced this case under the misguided notion that this court would undertake some sort of an audit of the partnership accounts and apply a strict mathematical approach to the claims for property settlement. The court ultimately disabused both parties of this flawed approach.
In relation to the husband’s witnesses, I have said all I want to say about the evidence of his general practitioner Dr C, and about the report of his cardiologist Dr H. With the husband’s defacto partner, Ms L, I found her to be a most impressive witness. She gave her evidence well, she was measured in her responses, and she made appropriate concessions.
Turning to the wife, I found a number of difficulties not only with her evidence but also with the presentation of her case. I have referred already to the lack of necessary preparation and compliance with orders in the lead-up to the final hearing, but there was also her mindset of not being prepared to accept what the husband says or the documents he ultimately produced and which played a significant role in the hearing not being able to be completed in two days and having to be adjourned. When given the opportunity to present further evidence she came up with schedules which were inaccurate (e.g. in relation to the futures trading losses) and which led to a waste of the court’s valuable time. Parts of her case were built on a lack of understanding of certain documents which she had in her possession all along, and her mistrust of the husband.
The wife presented medical reports from her medical practitioner and a psychologist relating to her alleged ill-health. Neither of the authors of these reports were required for cross-examination. I will address these reports later in these reasons when considering the relevant s 75(2) factors.

The assets, liabilities and financial resources of the parties

At the date of commencement of cohabitation – 18 March 1978

The husband had the following:
Assets
Datsun […] motor vehicle  $3,000-$4,000
Interest in farming partnership with his parents  NK
Liabilities  NK
Financial resources  NK
The wife had the following
Assets
Toyota […] motor vehicle  $3,000
Glory box of linen, crockery, and household goods  NK
Savings  NK
Liabilities  NK
Financial Resources  NK
In relation to these assets, liabilities and financial resources I make the following comments:
115.1.The wife presented no evidence of the value of her glory box or of the savings that she claims to have had. Thus I am not prepared to include the estimates the wife put in her documents.
115.2.The figures in relation to the values of the respective motor vehicles of the parties are agreed.

At the date of separation – 9 June 2004

The evidence does not allow me to set out in schedule form a complete inventory of the assets, liabilities and financial resources of the parties at this time, and in any event there were no valuations of the assets directed to the date of separation.

At the time of the hearing

The relevant assets, liabilities and financial resources of the parties are as follows:
Assets
The farming property at [Farm 1] (agreed value)  $680,000
The farming property at [Farm 2] (agreed value)  $880,000
The farming property at [Farm 3] (agreed value)  $220,000
Property at [K Street Town 1] (agreed value)  $325,000
Property at [L Street Town 1] (agreed value)  $350,000
Property at [E Street Brisbane Suburb 1] (agreed value)             $380,000
Property at [B Street Town 2] (agreed value)  $275,000
Property at [V Street Brisbane Suburb 2] (agreed value)             $370,000
Joint savings with Elders Risk Management (agreed)  $1,800
Joint savings - Macquarie Cash Management Account
(equally divided between the parties)  $18,000
Joint savings – Bank SA Business Maximiser Account (agreed)     $106,166
Farm machinery (agreed value)  $100,136
The wife’s Holden […] motor vehicle (agreed value)  $6,000
The husband’s Nissan utility (agreed value)  $5,000
The husband’s share of the divided shares and precious metals
(agreed)  $114,000
The wife’s share of the divided shares and precious metals (agreed) $114,000
The husband’s shares purchased post-separation (agreed value)   $18,450
The [Ms Lopez] Farm Account (agreed)  Nil
The [Ms Lopez] Business Account (agreed)  $10,000
The husband’s personal drawings from the Partnership Accounts $58,000
The wife’s personal drawings from the Partnership Accounts
(agreed)  $124,000
The wife’s paid legal costs (agreed)  $30,000
The amount received by the husband by way of partial property
settlement (agreed)  $40,000
The amount received by the wife by way of partial property
settlement (agreed)  $40,000
The husband’s entitlement in the [Mr Derry] Superannuation
Fund (agreed)  $391,695
The wife’s superannuation entitlement (agreed)  $376,149
Liabilities
Joint Bank SA Portfolio Account (agreed)  $125,456
Joint Bank SA FDA (agreed)  $480,000
Financial Resources  NIL
In relation to these assets and liabilities I make the following comments:
118.1.Both parties agree that their respective superannuation entitlements should be included in the one asset pool with the non-superannuation assets. I note that these entitlements follow on from the splitting order made by consent on 4 December 2008. The reason that the husband’s entitlement is slightly greater than the wife’s is that he made an extra contribution to the fund.
118.2.It was agreed on the first day of trial that the furniture, household and personal effects of the parties had been divided between them and should not be brought to account.
118.3.The husband owns land at Town 6 jointly with his defacto partner but the entire purchase price was borrowed and there is no equity to be included in this schedule.
118.4.The wife’s counsel cross-examined the husband as to a stone roller that he owns with another farmer. The wife’s case is that they rent out this piece of equipment and pocket the cash. She was looking to add back this money to the asset pool, but the wife presented no evidence of the amount allegedly involved, and I accept the husband’s evidence that it is kept on the other farmer’s land and it has not been rented out for more than five years. There was also no evidence of the value of this item and thus it is not possible for me to even include it as an asset with a specified value.
118.5.It is agreed that the paid legal costs of the parties should be notionally added back to the pool, but it is necessary not to double up if monies from which those costs have been paid is also to be added back. This is certainly the case with the husband, but the wife used monies that are not proposed to be written back in any event.
118.6.There is agreement that of the monies the wife has had from the partnership accounts and the sale of shares $124,000 should be notionally added back as being used by her personally and not for farming expenses. However, with the husband there is a dispute as to how much of the $81,000 that he drew from the partnership accounts was for personal use and not to cover farming expenses and thus should be notionally added back. The wife initially claimed that all of the $81,000 was for the husband’s own use, but on the husband’s evidence only $58,000 was. I accept the evidence of the husband, parts of which were ultimately conceded by the wife in cross-examination.
118.7.I have already referred to the wife’s unrealistic and ultimately unsuccessful claim to notionally add back on the husband’s side alleged futures trading losses of over $300,000. I am satisfied that the losses were in fact only $66,000, but the question then becomes should that amount be notionally added back. Economic losses are a recognised category of notional add backs (Omacini and Omacini (2005) FLC 93-218 at 79,617 – 79,618), but as Baker J said in the seminal case of Kowaliw and Kowaliw (1981) FLC 91-092 at 76,645:
If a party has acted in the manner to which I have referred earlier either by:
(a)embarking upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)acting recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value,
then such conduct in my view and the economic consequences which flow there from are clearly matters to which the Court may have regard pursuant to the provisions of sec. 75(2)(o).
If, on the other hand, losses of a financial kind have been suffered by the parties to a marriage in the course of the pursuit of matrimonial objectives, such as the gaining of income or the acquisition of assets whether the liability for such losses be joint or several then, in my view, such losses should be shared by the parties (although not necessarily equally) and taken into account when altering property interests.
Here, these losses are losses that should be borne equally by the parties. I reject the claim of the wife that she knew nothing or very little of this trading. I accept the evidence of the husband that it was a business conducted in the joint names of the parties and the wife was fully aware of and involved herself at all times in the same. I also accept the husband’s evidence that some of these losses were incurred to shore up the value of shares that the parties also held. Thus, there is no basis to notionally add back these losses.
118.8.Included in the asset pool are the shares purchased by the husband since separation. I note that they were purchased without any contribution thereto by the wife.
118.9.With the Bank SA Business Maximiser Account, that is the account into which the lease payments for the farming properties are paid every six months. Clearly then there will be more money in this account by the time this judgment is delivered, but I have no detailed evidence of how much that will be. Thus I cannot take this further money into account.
118.10.I observe that the capital gains tax payable by the parties on the proceeds of sale of two of the Queensland properties was assessed in the 2007/2008 financial year, and comprises part of their current respective tax liabilities. However, no adjustment is sought between them for this. Similarly, in the 2008/2009 financial year the parties transferred a number of Company 3 shares to their adult children. As at the date of the hearing the parties had not been assessed for capital gains tax on this transfer, but again no adjustment is sought by either party in relation thereto.
118.11.With the liabilities, the fully drawn advance is secured against the three farming properties, and the portfolio account is secured against the Queensland properties. They both appear as liabilities in the partnership accounts despite the trustee company owning the farming properties. As referred to above there are obvious difficulties in dealing with the liabilities if one party does not take all of the farming properties and one party does not take all of the Queensland properties. I will need to address these difficulties in framing the final orders depending upon the distribution of these properties, but given that the wife certainly seeks two of the Queensland properties, and that is agreed to by the husband then the latter is certain to happen.
118.12.With the Queensland properties, if any one of them has to be sold then there will be capital gains tax payable, but I have no specific evidence of what that will be. In paragraph 66 of his affidavit of evidence-in-chief the husband sets out what he says the tax will be if all of the properties are sold in one financial year, and what it would be if he retained them and later on-sold them. However, there is no indication of the source of his calculation, and in any event neither party seeks that all of these properties be sold or that the husband retain all of them. Therefore these calculations do not assist me.
118.13.Each party has a tax liability, the wife’s at approximately $59,000, and the husband’s at approximately $47,000, although there was some confusion on the evidence as to the precise amount owing by the husband. Both parties agree that these liabilities are not to be brought to account. I also note that the husband’s liability was reduced by the Australian Taxation Office retaining a tax refund of $3,095. It is also agreed that that amount is not to be brought to account here.

Contributions

Ultimately it was agreed between the parties that the respective contributions should be assessed as equal, and thus I do not need to address the specific issues that each of them initially raised in their material.

Section 75(2) of the Family Law Act 1975

I now turn as s 79(4)(e) of the Act dictates to the individual matters to be taken into account pursuant to s 75(2). However I will only address those factors that have either been raised by one or other of the parties and those that I consider relevant.

a)The age and state of health of each of the parties;

The respective ages of the parties are such that their opportunities for employment are limited. Fortunately the husband has secure employment in the professional practice operated by his current defacto partner, and it seems that he will be able to continue in that employment for as long as he is able to do the work. At some stage though he proposes to retire and return to the farming properties.
With the wife, she last worked when she operated her health care business in Town 5. She ceased that in 2007. However, despite her age it seems that she is able to return to employment in the education field.
Thus, age is not in fact an issue for either party.
With their health, I have addressed the husband’s position earlier in these reasons and I do not need to repeat that. Suffice to say that I am not persuaded that his state of health prevents him from continuing in his current employment.
With the wife, she has two health issues, namely a very mild right carpal tunnel syndrome, and depression. These conditions have allegedly kept her from working.
Her carpal tunnel syndrome led her to cease her health care business, but there is no suggestion that she would be looking for work in this field again. With her depression, that appears to have resulted from “the stressful circumstances of her divorce” and “subsequent lengthy property settlement”. Thus it can be assumed that once those stressors are out of the way then these conditions will not prevent her from working.

b)The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

In relation to the income of the parties the financial statement of the husband reveals that as at 20 July 2009 he had an average weekly income of $1,070. That includes his share of the income from the partnership. His claimed total expenditure was $967 per week. He says that he and his defacto partner “contribute the sum of $1,600 per month into [a] joint account to pay rent, utilities, housekeeping expenses and mortgage payments.”

With the wife, according to her financial statement filed on 26 February 2009, her ongoing income from the partnership was $326 per week. It is unclear what her total expenses were but her rent was $270 per week and her day to day living expenses were claimed to be $1,000 per week, although the wife did not provide any breakdown of that amount.
As far as their respective capacities for appropriate gainful employment, I have addressed that when considering their age and health, and I do not propose to repeat what I have said about that. Suffice to say I find that each party does have such a capacity.
In relation to the property of the parties I have set out the relevant property for these proceedings in paragraph 117 above. It should be noted though that that schedule does not include all the assets and liabilities of the parties. For example, in addition they each have bank accounts, furniture and household effects, taxation liabilities, credit card debts, and personal loans. The wife has the plant and equipment from her retail and her health care businesses. The husband also owns land jointly with his defacto partner which is subject to a mortgage.
As a result of my findings on contributions, the total value of the relevant net property (including the superannuation entitlements of the parties) is to be divided equally between them, but there is still a dispute about what property each party will receive, and what liabilities they will be responsible for.
There are no relevant financial resources that either party has which need to be taken into account here.
The wife’s case is that there is a significant disparity between her income and earning capacity and that of the husband, and particularly when the income of the husband’s defacto partner is taken into account. According to her financial statement, Ms L’s income is $1,095 per week.
Although s 75(2)(m) allows for this court to take into account the financial circumstances relating to the cohabitation between the husband and Ms L, it is not open to simply add up their separate incomes and treat that total amount as being all available to the husband. The husband of course enjoys the benefit of some of the income of Ms L, but she has her own commitments to meet which do not relate to the circumstances of their cohabitation.
In any event, until the wife does obtain employment, presumably in the education field, the husband’s income will be greater than hers. No evidence was put before the court though as to what the wife might earn in the education field, and thus it is not possible to predict what if any disparity there will then be. However, when the financial circumstances of the cohabitation between the husband and Ms L are taken into account it is apparent that, as Mr Jordan put it, the wife is never going to get ahead of them. How great the disparity is though remains unknown.
The husband’s response to this submission is that with the assets that the wife will have after the conclusion of these proceedings, there will be sufficient income producing assets and other monies that she can invest, as well as the income that she earns from employment, to ensure that she will have enough income to more than adequately support herself. It is suggested though that when the assets that she will have are analysed, it is apparent that a significant amount is tied up in superannuation and she will need to purchase a house, and thus she may not have sufficient to support herself and particularly at any level approaching the husband’s standard of living. However, I do not accept that. With her superannuation, there is not long for her to wait before she can access that if she chooses, given that she is relatively close to retirement age, and she will still have ample assets available to invest if she wishes.
Accordingly, I am not persuaded that there is a sufficient disparity of income and earning capacity between the parties, and even after taking into account the financial circumstances of the cohabitation between the husband and Ms L, to justify an adjustment to the percentage division resulting from a consideration of their respective contributions. As the husband’s counsel submitted, the key factor is that the wife will have significant assets at her disposal as a result of these proceedings, and I add, the purpose of considering any s 75(2) factor is not to equalise the respective financial positions of the parties, but to ensure that as in this instance, any disparity is appropriately taken into account.

(m)If either party is cohabitating with another person – the financial circumstances relating to the cohabitation;

I have already addressed this factor in considering s 75(2)(b).

Conclusion on section 75(2) factors

The husband’s case is that there should be no adjustment for any of the relevant s 75(2) factors. He says that in effect those factors balance each other out. The wife’s case though is that there should be a 10% adjustment because of the disparity in income and earning capacity between the parties.
I find that although there may be a disparity in the income and earning capacity of the parties I certainly do not attach the same significance to this as the wife’s counsel does, and indeed I do not consider that this warrants any adjustment in the wife’s favour.

SECTION 79(4)(d), (f) AND (g) OF THE FAMILY LAW ACT 1975

Next, I am obliged to consider the effect of any proposed orders upon the earning capacity of either party (s 79(4)(d)); any other order made under the Act affecting a party to the marriage or a child of the marriage (s 79(4)(f)); and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide or has provided to a child of the marriage
(s 79(4)(g)).
In relation to the first matter, the evidence does not indicate that the earning capacity of either party will be affected by the proposed orders.
With the second and third matters, neither are relevant here.

Conclusion

The net assets of the parties should be divided equally between them.

Just and equitable

Pursuant to s 79(2) of the Act the court cannot make an order unless the court is satisfied that in all the circumstances it is “just and equitable” to make the order. To assess that I need to stand back and consider the practical affect of my proposed orders (Waters and Jurek (1995) FLC 92-635; JEL and DDF (2001) FLC 93-075; Phillips and Phillips (2002) FLC 93-104).
The net asset pool including the superannuation entitlements of the parties comprises a monetary equivalent of $4,427,940. Thus, the effect of my findings is that each party is entitled to net assets to the value of $2,213,970.
The husband has had, currently has and seeks to have the benefit of net assets totalling $3,218,436 calculated as follows:
Assets
The property at [Farm 1]  $680,000
The property at [Farm 2]  $880,000
The property at Farm 3]  $220,000
[K Street Town 1]  $325,000
[L Street Town 1]  $350,000
[B Street Town 2]  $275,000
Savings - Elders Risk Management Account  $1,800
One half of the proceeds of the Macquarie Cash Management
Account already distributed to the parties  $9,000
One half of the proceeds of the Bank SA Business Maximiser Account $53,083
The farm machinery  $100,136
Nissan Utility  $5,000
One half of the precious metals and shares already distributed
to the parties  $114,000
The husband’s shares acquired post-separation  $18,450
The husband’s drawings from the Partnership Accounts
not utilised for business purposes  $58,000
The amount received by the husband by way of partial property
settlement  $40,000
The husband’s superannuation entitlement with the
[Mr Derry] Superannuation Fund  $391,695
Sub total  $3,521,164
Liabilities
One half of the Bank SA Portfolio Account  $62,728
One half of the Bank SA FDA  $240,000
Sub total  $302,728
Net total  $3,218,436
The wife has had, currently has and seeks to have the benefit of net assets totalling $2,089,504 calculated as follows:
Assets
The property at [Farm 2]  $880,000
[E Street Brisbane Suburb 1]  $380,000
[V Street Brisbane Suburb 2]  $370,000
One half of the proceeds of the Macquarie Cash Management
Account already distributed to the parties  $9,000
One half of the Bank SA Business Maximiser Account  $53,083
Holden […] motor vehicle  $6,000
One half of the precious metals and shares already distributed
to the parties  $114,000
The wife’s drawings from the Partnership Accounts not utilised
for business purposes  $124,000
Paid legal fees  $30,000
[Ms Lopez] Business Account  $10,000
The amount received by the wife by way of partial property
settlement  $40,000
The wife’s superannuation entitlement  $376,149
Sub total  $2,392,232
Liabilities
One half of the Bank SA Portfolio Account  $62,728
One half of the Bank SA FDA  $240,000
Sub total  $302,728
Net total  $2,089,504
Both parties still seek to have the farming property at Farm 2, and as can be seen I have included that property in each party’s schedule for the time being. If the husband retains it then he would have to pay to the wife the sum of $1,004,466. That amount would be reduced though if the husband took over responsibility for the Bank SA FDA, and presumably this would be sensible given that that loan is secured over all three farming properties. The amount to be paid to the wife in that event would be $764,466.
On the other hand if the wife retained the property at Farm 2 and the liability for the FDA remained equal then the husband would only have to pay her $124,466.
I now turn to consider the fate of the property at Farm 2.
The husband’s case is that Farm 2 is one of two properties, with the other being Farm 1, which were owned and farmed by his family for some time previously, and he has an affinity with these properties as a result. Indeed, as the husband put it in evidence, these properties are “important to [him], I know most of the rocks and stumps and birds nests on them”.
Further, the husband says that to take out Farm 2 would render the remaining properties an unviable farming proposition. Or, put another way, all three properties need to be kept together in the one ownership to ensure there is a viable farming entity. Although the husband no longer farms these properties, and they are all leased out to separate individuals who farm them as part of larger properties, the husband harbours the notion of retiring to the farming properties and running them on a “much smaller scale” than he has done in the past. In particular, he would look to share farm these properties. That, he says, is one of the reasons why the house on Farm 1 is not leased out, and he regularly attends there to keep the machinery in running order, to attend to the repair, maintenance and upkeep of the house property, and to check on all of the farming properties.
For the wife’s part her case is that she had as much to do with Farm 2 as the husband did, it having been purchased by them from his parents in 1980, and she having worked on it with the husband subsequently. The wife says that given that the three properties have now been leased out for some time individually there is no basis for them to be kept as one viable farming entity. She says that the husband will not return to farming given his health and his new lifestyle.
For the wife to have Farm 2 will provide her with a reasonable income from the ongoing lease arrangement. At the time of the hearing those payments were $55,000 per annum.
In this instance I am persuaded by the husband’s arguments. He has history on his side, and whilst there is a possibility of the husband resuming farming or even just retiring to the farming properties, it is appropriate that he have all three properties. It also needs to be emphasised that he has been responsible for the repair, maintenance and upkeep of the house property on Farm 1, and in a sense he has kept an eye on all three farming properties.
The wife’s interest in Farm 2 is only what it can provide her by way of rental income, yet there are other investments that she could pursue with the money that she will receive from the husband in these proceedings.
Thus I propose to leave all three properties with the husband. They are owned by the trustee company of a family trust and the husband and the wife are the directors and shareholders of that company. Accordingly I propose to make orders for the wife to resign as a director and to transfer her shares to the husband. On that basis the husband would pay to the wife the sum of $764,466, and indemnify her in relation to the Bank SA FDA secured over these three properties.
In summary, the proposed orders will see the husband retain the farm properties subject to the liability to Bank SA, the farm machinery, three of the Queensland properties, his motor vehicle, the Elders Risk Management Account, his shares, his personal drawings from the partnership accounts, his share of the proceeds of various bank accounts, his share of the assets distributed to the parties by agreement and pursuant to the partial property settlement order, and his superannuation entitlements in the Mr Derry Superannuation Fund. He will still have a joint liability with the wife for the Bank SA Portfolio Account, and he will have to obtain a loan to make the required payment to the wife.
With the wife she will retain two of the Queensland properties, her motor vehicle, her business account, her personal drawings from the partnership account and the sale of shares, her share of the proceeds of various bank accounts, her share of the assets distributed to the parties by agreement and pursuant to the partial property settlement order, and her superannuation entitlement. Like the husband she will have a joint liability for the Bank SA Portfolio Account, but she will receive cash of $764,466.
As discussed above, with the wife’s earning capacity, with the income from the investment properties, and the other monies that she will have, she will be able to support herself more than adequately and purchase a house property.
Analysed in this way, and bearing in mind the history of the parties, their respective contributions and the relevant s 75(2) factors, in my view there is nothing unjust or inequitable about the orders that I propose.

I certify that the preceding one hundred and sixty-two (162) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 13 May 2011.

Associate:

Date: 13 May 2011

[2011] FamCA 444

13 May 2011

Key Legal Topics

Areas of Law

Family Law

Property Law

Equity & Trusts

Legal Concepts

Remedies

Costs

Injunction