Fisher and Fisher - [2009] FMCAfam 826

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FISHER & FISHER

[2009] FMCAfam 826

FAMILY LAW – Property settlement – purchase of land and timber rights by husband – valuation of the timber – husband alleges misappropriation of funds by the wife – notional pool of assets – initial contributions of the husband – health issues of the husband – just and equitable order.

Family Law Act 1975, ss.75(2), 79

C & C (1998) FamCA 143
Re NHC and RCH (2004) FLC 93-204
Farnell (1996) FLC 92-681
Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
In the Marriage of Phillips (2002) 29 FAMLR 128
In the Marriage of RH and JW Smith (1991) 15 FAMLR 206
Kowaliw (1981) FLC 92-092
Little (1990) 14 FAMLR 118
Malpass & Mayson (2000) FamCA 1253
Mandelbaum [2009] FamCAFC 138
Marker (1998) FamCA 42
AJO v GRO (2005) FLC 93-218
Pierce (1999) FLC 92-844
Townsend (1995) FLC 92-569

Applicant:

MR FISHER

Respondent:

MS FISHER

File Number:

BRC1243 of 2007

Judgment of:

Baumann FM

Hearing dates:

8 & 9 December 2008

Date of Last Submission:

12 February 2009

Delivered at:

Brisbane

Delivered on:

6 August 2009

REPRESENTATION

Counsel for the Applicant:

Mr Balzamo

Solicitors for the Applicant:

Counsel for the Respondent:

Mr Fleetwood

Solicitors for the Respondent:

Reaburn Solicitors

ORDERS

That the Applicant pay $330,000.00 to the Respondent as follows:
(a)$15,000.00 by 3 September 2009;
(b)$142,500.00 by 2 October 2009;
(c)$142,500.00 by 2 November 2009;
(d)$30,000.00 by 14 January 2010.
That in the event that the Applicant defaults in the payment of any of the sums referred to in Order 1 the following shall occur:
(a)The total balance then outstanding shall be payable immediately;
(b)Interest shall be payable at a rate of 8% per annum on the total balance then outstanding from the date of these Orders to the date of payment.
That on or before 2 October 2009 the Wife shall do all such things and sign all such documents as are necessary to:
(a)Transfer her shares in [F] Pty Ltd by a Share Transfer submitted for execution by the Husband thereby transferring her shares to the Husband or whomsoever the Husband shall direct in writing;
(b)Resign as a Trustee and/or member of the [C] Superannuation Fund;
(c)Relinquish any claim to any entitlement to the [C] Superannuation Fund;
(d)Sign such documents as may be required to consent to enable the Husband to borrow funds to comply with Order (1).
That upon the Wife signing the documents in Order 3 the Husband shall indemnify the Wife against any actions claims or demands against her arising out of her involvement with [F] Pty Ltd, [C] Pty Ltd, [C] or The [C] Superannuation Fund excluding any liability established and proven by the Australian Taxation Office.
That the Husband shall sign all such documents and do all such things as are necessary to enable the Wife to lodge Caveats over any properties being offered by the Husband as security for the payments referred to in Order (1).

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] FMCAfam 826
Decision Date: 6 August 2009

CaseChat Overview and Summary

In the case of Fisher and Fisher, the parties were a married couple whose dispute involved the valuation of timber on certain properties and related financial matters. The case was heard and determined in the Family Court of Australia. The central legal issues that the court had to decide related to the valuation of timber on the properties in question, the feasibility and viability of timber harvesting operations, and the financial obligations between the parties.

The court considered expert evidence from two sources. The wife relied on a report from a Forest Resource Manager who estimated the value of the timber on the property to be around $310,000, but noted significant uncertainties and potential high costs associated with accessing and harvesting the timber. In contrast, the husband's expert, a Consulting Forester, critiqued the wife's expert's report and concluded that the timber harvesting operation would likely be economically unviable due to ecological constraints, high costs, and regulatory hurdles. The court found that the husband's expert provided a more credible assessment of the situation, considering the environmental sensitivity of the property and the legal restrictions on timber harvesting.

Based on the evidence and the court's reasoning, the court ordered the husband to pay the wife $330,000 in instalments, with immediate payment conditions and interest in case of default. The court also directed the wife to transfer her shares in a company, resign from a superannuation fund, and relinquish claims to that fund. The husband was required to indemnify the wife against certain liabilities. Additionally, the court ordered the husband to enable the wife to lodge caveats over certain properties as security for the payments and to withdraw them upon certain conditions. The court also discharged a spousal maintenance order and made provisions for the relinquishment of claims to other properties and assets.

In summary, the court's decision was grounded in the detailed analysis of expert evidence regarding the economic viability of timber harvesting and the financial obligations between the parties. The orders reflect a balanced approach to the distribution of assets while considering the specific circumstances of the case.

Orders

Orders of the court

That the Applicant pay $330,000.00 to the Respondent as follows:

(a) $15,000.00 by 3 September 2009;

(b) $142,500.00 by 2 October 2009;

(d) $30,000.00 by 14 January 2010.

That in the event that the Applicant defaults in the payment of any of the sums referred to in Order 1 the following shall occur:

(a) The total balance then outstanding shall be payable immediately;

(b) Interest shall be payable at a rate of 8% per annum on the total balance then outstanding from the date of these Orders to the date of payment.

That on or before 2 October 2009 the Wife shall do all such things and sign all such documents as are necessary to:

(a) Transfer her shares in [F] Pty Ltd by a Share Transfer submitted for execution by the Husband thereby transferring her shares to the Husband or whomsoever the Husband shall direct in writing;

(b) Resign as a Trustee and/or member of the [C] Superannuation Fund;

(d) Sign such documents as may be required to consent to enable the Husband to borrow funds to comply with Order (1).

That upon the Wife signing the documents in Order 3 the Husband shall indemnify the Wife against any actions claims or demands against her arising out of her involvement with [F] Pty Ltd, [C] Pty Ltd, [C] or The [C] Superannuation Fund excluding any liability established and proven by the Australian Taxation Office.

That the Husband shall sign all such documents and do all such things as are necessary to enable the Wife to lodge Caveats over any properties being offered by the Husband as security for the payments referred to in Order (1).

That upon the payment referred to in Orders 1(c) and (1)(d) the Wife shall sign all such documents and do all such things as are necessary to enable the Husband to withdraw the Caveats referred to in Order 5.

That both the Husband and the Wife relinquish any claim, one against the other, to any other interest in any property not otherwise herein specifically referred to including but not limited to motor vehicles, bank and building society accounts, superannuation funds or schemes, shares (public and private), jewellery, furniture, appliances, debtors, chooses in action and any other property, whether realty or personalty, wheresoever situate and/of whatsoever kind presently in the possession of or registered in the name of the other party.

That the Order for spousal maintenance of $200.00 per week be discharged immediately.

That there be no Order as to costs.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The expert evidence, as to the possible value of timber, offered to the Court came from the following resources:-a)The wife relied on the report and affidavit filed 20 May 2008 by Mr C. He is a certified Forest Resource Manager employed by [K] Products and has been engaged in the timber and forestry industry for over 28 years. On the 31 January 2008 and 11 February 2008 he attended and inspected the timber situated on the subject properties. His extensive report, dated 14 March 2008, for the reasons and adopting the methodology he identified concluded as follows:-“There is a significant volume of assessed merchantable timber on the property with a raw assessed value of $357,000. After consideration of the representative value of the assessment data the informed adjusted estimate is $310,000. The net harvest area is only 32% of the gross property area and all non-commercial areas and “ecologically sensitive” areas likely to be prohibited from harvest under a PNF-PVP and the COP as far as these are known have been removed from yield calculations. There is uncertainty about DECC issue of consent to conduct forest operations on the property and the impact of recorded threatened species on forest operations until the application process is commenced. Consequently any timber valuation must be heavily qualified. Where consent to harvest the net harvest area as assessed is approved by issue of a PNF-PVP costs to access timber are projected to be hellishly high (road gravelling and drainage line works) and must be deducted from estimated gross royalty. These costs are estimated at $50,000-$100,000 but could easily be higher. The net gain (gross royalty less costs) to the landowner is estimated to be $200-$250,000.It may not be possible or prudent to harvest all the merchantable timber in the short term. The impact of seasonal logging conditions, practice of sustainable forest harvest and tax implications if royalty income is earned within a single financial year may make delayed harvest a practical management option. The costs of any road infrastructure etc must be carried from the first year and earnings in subsequent years discounted. The timing of operations can have an impact on the net gain.There is significant value in the standing timber, risk to access the timber to be determined under application to DECC for consent to harvest and considerable costs likely to access any timber. Uncertainties in the equation make definitive estimation difficult.”For clarification, I record that Mr C’s employer [K] Products Pty Ltd claims to be “the largest supplier of poles for overhead lines installed by electricity and telecommunication companies.”b)The husband primarily relied upon the report and affidavit of Mr L filed 23 June 2008. He is a Consulting Forestor who has been engaged in the forestry and environmental sector for 12 years. The husband asked him to “assess and comment on the timber valuation estimation prepared by Mr C”. He did not inspect the property but relied on the reports of Mr C as well as reports by [B] Conservation Services and [P] Pty Ltd in essentially critiquing the report by Mr C. Again he provided a detailed report in which he claimed that [S] Consulting (of which he is a partner) is “a forestry and environmental education consultancy” which has expertise “in the planning, implementation and supervision of Private Native Forest (PNF) harvesting operations in New South Wales operating under the PNF Code of Practice (COP) for northern New South Wales.”Mr L came to the following conclusions:-· “[S] Consulting considers that it is highly unlikely that approval would be granted to conduct a harvesting operation under the NSW PNR COP on the property Property C given the results of the ecological assessment carried out by [B] Conservation Service. · If in the unlikely even approval was granted for an ecological harvesting operation the volume of timber that is likely to be available for harvesting is likely to be severely reduced from that considered by [K] Products and any additional environmental prescription would make the operation unviable. · [S] Consulting believes that the costs associated with roading as inferred by KWP in their report are severely understated. Property C is dominated by alluvial clays and other fine grained sediments and as such is poorly drained and will require considerable investment in roading infrastructure to ensure that any harvesting operation meets the requirements of the PNF COP, especially the requirement that any roads must be maintained to ensure that road surfaces remain stable and drainage systems and sediment control remain functional for the life of the PVP. · [S] Consulting considers that the costs associated with the rehabilitation of snig tracks and snig track drainage feature crossings has been severely under estimated by KWP and that compliance costs associated with the PNF COP are much greater especially in environmental sensitive areas. · The costs associated with the implementation of a post harvest burn and post harvest regeneration assessment have not been considered by KWP. These costs are also likely to be significant. · [S] Consulting considers that given the environmental nature of the property and its current environmental condition that a harvesting operation carried out on Property C would be economically unviable taking into account the gross value of the timber as assessed by KWP and the expected costs associated with the harvesting operation as outlined I this document.”c)As can be seen, Mr L relied upon two reports, one by Mr G of [B] Conservation Services dated June 2008. Mr G swore an affidavit, attaching his report which was filed on 20 June 2008 and relied upon by the husband. Mr G is an ecologist which has been self-employed for eight years and said he had “over 12 years experience assessing Endangered Ecological Communities and Threatened Species habitats in northern New South Wales.” He extensively inspected the property on two separate occasions in March 2008. He concludes that:- “[Property C] (The study area) consists of two separate allotments totalling 1008 hectares (Figure 1) almost entirely covered in Endangered Ecological Community, High Conservation Value native vegetation and Threatened Species habitats protected under NSW and Commonwealth legislation (NSW Threatened Species Conservation Act, 1995, Commonwealth Environment Protection and Biodiversity Conservation Act, 1999 and NSW Native Vegetation Act, 2003). The Study area is bordered to the east by the [N] and [M] State Forest and by private property in all other directions. THE HARVESTING OF TIMBER FROM THE EXTENSIVE AREAS OF ENDANGERED ECOLOGICAL COMMUNITY AND THREATENED SPECIES HABITAT ON [PROPERTY C] IS PROHIBTED UNDER NSW LEGISLATION. LESS THAN 5% OF THE STUDY AREA IS NOT ENDANGERED ECOLOGICAL COMMUNITY OR THREATENED SPECIES HABITAT, CONSISTING PRIMARILY OF THE CLEARED HOUSE SITE AND SMALL AREAS LARGELY CLEAR OF THE NATIVE VEGETATION.The Study Area is located in the mid-upper catchment of [M] south of [R], it is an important component of the [B] Wetlands, an area recognised as a national wetland conservation priority area. The property is located upon a large floodplain supporting extensive wetland communities, floodwaters of a 1:100 flood event cover the majority of the site and indicate existence of floodplain Endangered Ecological Communities (EECs) protected by both State and Commonwealth legislation.The majority of the [M] floodplain occurs upon alluvial clay and other fine grained sediments, whilst limited areas of sandy substrate occur in the northern portions of the property. Those areas of substrate dominated by sand are not considered to represent EECs, but have high value as habitat for over 25 threatened fauna species known from the area.”