FRYMANN & FRYMANN

FAMILY COURT OF AUSTRALIA

FRYMANN & FRYMANN

[2012] FamCA 640

FAMILY LAW – PROPERTY SETTLEMENT – Adjustment of property – where the husband’s contributions were greater than the wife’s – where no adjustment for either party was made – where the wife’s allegations of oppression and physical abuse were not causally related to the issue of contribution – where there was no basis for notional add-backs – where there were significant third party contributions by the husband’s parents – where both parties made significant contributions at home and financially during the relationship

FAMILY LAW – PROPERTY – where there was no proper evidence as to the value of the husband’s shareholding in a corporation – where there was non-disclosure by the husband in relation to a business controlled by him – where it was just and equitable to include an order for the corporation to discharge its liability to the parties’ eldest daughter – where it was otherwise not necessary to make extra provision for the wife due to the husband’s non-disclosure

FAMILY LAW – PARTNERSHIP – Dissolution of partnership – where the Court makes orders that it was just and equitable to dissolve the partnership pursuant to s 35 of the Partnership Act 1892 (NSW) – where further orders are made to indemnify the wife against any liability she may incur as a consequence of her former status as a partner – where the parties can no longer conduct the partnership business co-operatively – where the husband has had unilateral control of the partnership business for nearly three years

Family Law Act 1975 (Cth) s 75 and s 79
Judiciary Act 1903 (Cth) s 79
Partnership Act 1892 (NSW) s 26 and s 35

B & K (1992) 15 Fam LR 343
C & S (2002) 29 Fam LR 406
Chorn & Hopkins (2004) FLC 93-204
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Marriage of Coghlan (2005) 33 Fam LR 414
Marriage of Kennon (1997) 22 Fam LR 1
AJO & GRO (2005) FLC 93-218
Weir & Weir (1992) 16 Fam LR 154

APPLICANT:

Ms Frymann

RESPONDENT:

Mr Frymann

FILE NUMBER:

NCC

2046

2010

DATE DELIVERED:

7 August 2012

PLACE DELIVERED:

Newcastle

PLACE HEARD:

Newcastle

JUDGMENT OF:

Austin J

HEARING DATE:

24, 25 & 26 July 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr R. Maurice

SOLICITOR FOR THE APPLICANT:

Everingham Solomons Solicitors

COUNSEL FOR THE RESPONDENT:

SOLICITOR FOR THE RESPONDENT:

Attwaters

Orders

The parties shall forthwith do all such acts and things necessary to authorise and direct Bell & Johnson Solicitors and/or any other trustees of the net proceeds of sale of the rural property known as “K” to pay such net proceeds of sale to the wife.
The parties shall forthwith do all such acts and things necessary to authorise and direct Everingham Solomon Solicitors to pay the net proceeds of cattle sales held by those solicitors upon trust to the wife.
The parties shall forthwith do all such acts and things necessary to authorise and direct the Commonwealth Bank to pay to the wife the whole of the monies contained within, and then close, account number …010 held in the joint names of the parties.
The parties shall forthwith do all such acts and things necessary, either as directors of J Pty Ltd or as partners of the “F” partnership (“the partnership”), to transfer both possession and all right, title and interest in the following assets to the wife:
(a)       …Ford vehicle (rego. …000);
(b)       … Nissan vehicle (rego. …001);
(c)       Ford utility (rego. …004);
(d)… shipping container and contents located … at Town N, NSW; and
(e)… horse float.
Upon compliance with Order 4 hereof, pursuant to section 35(f) of the Partnership Act (NSW), the partnership is dissolved forthwith.
The parties shall do all such acts and things necessary as directors of J Pty Ltd to cause J Pty Ltd to pay to Ms R Frymann the sum of $122,277.18 within 60 days hereof.
The husband shall pay to the wife the sum of $225,470 within 60 days hereof.
Subject to payment in full pursuant to Orders 6 and 7 hereof:
(a)The husband is declared the sole proprietor (as between the parties) of all property of the partnership (other than that transferred to the wife pursuant to Order 4 hereof);
(b)The wife shall forthwith resign her directorship and/or any other office she holds in J Pty Ltd;
(c)The husband is declared the sole proprietor (as between the parties) of his shareholding in J Pty Ltd; and
(d)The husband is declared the sole proprietor (as between the parties) of any and all beneficial interest held by the parties in the Frymann Family Trust.
(e)The husband is declared the sole proprietor (as between the parties) of any and all beneficial interest held by the husband in the assets of the business trading under the name “F Company”.
Pending compliance with Orders 6 and 7 hereof, unless done so as to permit or facilitate compliance with Orders 6 and 7 hereof, the husband is restrained from transferring, selling, charging, mortgaging, or otherwise encumbering the property, which includes but is not limited to the livestock and chattels, of:
(a)The partnership (other than that property prescribed in Order 4 hereof); and
(b)J Pty Ltd (other than that property prescribed in Order 4 hereof).
Pending compliance with Orders 6 and 7 hereof, unless done so as to permit or facilitate compliance with Orders 6 and 7 hereof, the husband is restrained from transferring, selling, charging, mortgaging, or otherwise encumbering any asset of the business trading under the name “F Company”, other than the stock of the business which is ordinarily offered for sale in the course of its trade.
In default of payment in full pursuant to Orders 6 and 7 hereof:
(a)The wife is declared the sole proprietor (as between the parties) of all property of the partnership (including that transferred to the wife pursuant to Order 4 hereof);
(b)The husband shall forthwith resign his directorship and/or any other office he holds in J Pty Ltd;
(c)The wife is declared the sole proprietor (as between the parties) of the husband’s shareholding in J Pty Ltd and the husband shall forthwith do all such acts and things necessary to transfer all his right, title and interest in that shareholding to the wife;
(d)The wife is declared the sole proprietor (as between the parties) of any and all beneficial interest held by the parties jointly or individually in the Frymann Family Trust;
(e)The wife is declared the sole proprietor (as between the parties) of any and all beneficial interest held by the husband in the assets of the business trading under the name “F Company” and the husband shall forthwith do all such acts and things necessary to transfer all his right, title and interest in such assets to the wife; and
(f)The wife shall do all acts and things necessary within reasonable time to:
(i)Cause the sale of the partnership property (other than that prescribed in Order 4 hereof);
(ii)Cause the sale of J Pty Ltd property (other than that prescribed in Order 4 hereof);
(iii)Cause the sale of all property associated with the business trading under the name “F Company”;
(iv)Use the proceeds of such sales to pay the costs, commissions and expenses of such sales and discharge any liabilities of the partnership and J Pty Ltd, including the liability of J Pty Ltd to Ms R Frymann recognised in Order 6 hereof;
(v)Pay to herself from the net proceeds of such sales the sum due and owing to her pursuant to Order 7 hereof; and
(vi)Pay to the husband any remaining balance of such proceeds.
The husband shall indemnify, and keep indemnified, the wife in respect of any and all civil liability arising from the failure of either J Pty Ltd or the partnership to comply with its taxation or regulatory obligations:
(a)In the event of compliance with Orders 1-10 inclusive hereof, as and from 1 July 2010; or
(b)In the event of application of Order 11 hereof, as and from 1 July 2010 until the commencement of operation of Order 11.
The husband shall indemnify, and keep indemnified, the wife in respect of any and all alleged liability of the wife, either individually or jointly, to Ms W Frymann.
The wife shall indemnify, and keep indemnified, the husband in respect of the debt of $15,000 owed by the wife to Ms R Frymann.
Unless otherwise provided:
(a)Each party shall be the sole proprietor (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder and superannuation entitlements are deemed in the possession of the superannuant;
(b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession, and any debts in their respective sole names, including any individual liability for capital gains tax arising out of the implementation of these orders.
In the event of either party refusing or neglecting to sign within seven days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to s.106A of the Family Law Act.
Costs are reserved for 28 days.
Any and all outstanding applications are dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Frymann & Frymann has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC 2046 of 2010

Ms Frymann

Applicant

And

Mr Frymann

Respondent

REASONS FOR JUDGMENT

Introduction

The parties had a long marriage but they endured crushing misfortune in their lives which was likely a catalyst for their eventual separation and the acrimony that now pervades their relationship.
The parties’ financial interests are still linked in a number of nebulous ways. They remain business partners, joint directors of a corporation, presumably beneficiaries of a family trust, and joint holders of banking accounts. Their failure or inability to extricate themselves from one another’s personal affairs since their separation nearly three years ago has seemingly served to compound their acrimony.

Background

The parties met and commenced cohabitation in 1985. They later married in 1986.[1]
[1] Wife’s affidavit, par 6; Husband’s affidavit, pars 5, 32
Although the husband denied any recollection of it, the wife asserted they separated briefly in March 2002 following an unpleasant confrontation between them.[2] It is unnecessary to determine whether a matrimonial separation then occurred because, even if it did, it only lasted a week and the parties conceded the changes to their living arrangements during that week have no material bearing upon the outcome of these proceedings.
[2] Wife’s affidavit, pars 16, 22-28
The parties’ final separation occurred in October 2009,[3] shortly following another unpleasant confrontation between them in August 2009.[4]
[3] Wife’s affidavit, par 33
[4] Wife’s affidavit, pars 16, 29-32
On any view of it, the parties’ cohabitation lasted some 23 years.
The parties’ three children were born in 1986, 1989, and 1991.[5] The youngest child is now deceased and the eldest two children are adults.
[5] Wife’s affidavit, par 7
The emotional fortitude of the parties was seriously tested by tragedy on numerous occasions during their relationship. The wife suffered from two bouts of serious illness, their eldest child was severely injured and is now handicapped both physically and cognitively, and their youngest child after suffering from a serious illness died in 2011.
During their cohabitation the parties conceived various entities through which they conducted business. Those entities are:
a)A partnership named “F” (“the partnership”), in which the parties are equal partners, being the vehicle for their conduct of farming activities.
The partnership was formed shortly after the parties’ marriage.[6]
b)A corporation named “J Pty Ltd”.
It was an agreed fact that the husband was and is the sole shareholder but that both parties are directors of the corporation, contrary to the wife’s deposed belief.[7] J Pty Ltd was used for two purposes.
Firstly, it is the trustee of the “J Family Trust” (“the family trust”). No evidence was adduced to identify the species of the family trust or its beneficiaries.
Secondly, it operated a business under the trading name of “F Company” which business it conducted on behalf of the family trust.
J Pty Ltd, the family trust, and the F Company were all established at about the same time in or about August 2004.[8]
[6] Husband’s affidavit, par 76
[7] Wife’s affidavit, par 66
[8] Wife’s affidavit, par 66; Husband’s affidavit, par 79
The parties lived on a rural property called “K” from shortly following their marriage in 1986.[9] The property was owned by members of the paternal family, or entities controlled by them,[10] and the parties and their children lived upon the property without expense.[11]
[9] Wife’s affidavit, pars 80, 93, 94; Husband’s affidavit, par 34
[10] Wife’s affidavit, pars 73-74
[11] Husband’s affidavit, par 100 (second)
The family ultimately moved from the property into a house in the township of Town N in 2006, which house was purchased with compensation paid in satisfaction of the eldest child’s tortious claim arising out of her accident.[12]
[12] Wife’s affidavit, pars 107-113; Husband’s affidavit, pars 34, 63, 64
Upon separation in October 2009 the mother vacated the Town N house. The husband remained resident at that home until April 2012.[13] The parties both now live in separate rented accommodation in Town N.
[13] Wife’s affidavit, par 116
Title in “K” was transferred to the husband in December 2005 without payment of financial consideration. The property was sold in October 2010,[14] with the sale completed in July 2011.[15] The net proceeds of sale are now held in escrow awaiting division between the parties in accordance with the Court’s orders.[16]
[14] Wife’s affidavit, pars 199-200
[15] Husband’s affidavit, par 101 (second)
[16] Husband’s affidavit, par 102 (second)
The partnership has not been formally dissolved and therefore still exists.
J Pty Ltd and the family trust also still exist.
Although a business continues to trade under the name of F Company, the owner of that business is now the husband rather than J Pty Ltd.

Proposal and primary evidence of the wife

The wife sought the orders set out within her Second Amended Initiating Application filed on 10 April 2012. In effect, it was her proposal that:
a)She be paid $320,000 by the husband (Order 1(a)), although in final submissions it was submitted this sum should in fact be $508,669 by reference to the reconstructed balance sheet, in default of which numerous other consequential orders would apply (Orders 1(b), 4);
b)She have various chattels transferred to her from both the family trust and the partnership (Orders 1(c), 1(d));
c)The husband transfer to her a Ford utility (Order 1(e));
d)The husband assume and retain sole interest in J Pty Ltd and the family trust and indemnify the wife in relation thereto (Orders 2, 11);
e)The partnership be dissolved as from 30 June 2012, with the husband to retain all partnership assets, subject to the transfer of some chattels to the wife as earlier mentioned (Order 3);
f)The husband’s superannuation interest be split (Orders 5-10), but this discrete proposal was abandoned in final submissions;
g)The husband indemnify the wife against any loans owed by the parties to their eldest child and the husband’s mother (Orders 11, 12); and
h)Otherwise the parties retain other items of property in their possession and indemnify the other in relation thereto (Orders 13-16).
In support of her proposal the wife relied upon her affidavit filed on 5 July 2012 and her financial statement filed on 10 April 2012.

Proposal and primary evidence of the husband

The husband abandoned the orders set out in his Response filed on 19 October 2010. He did not avail himself of a procedural order permitting him to file an Amended Response several months in advance of the trial.[17] Instead, at the commencement of final submissions the husband tendered a Minute of Orders which he proposed.[18] In essence, the husband proposed:
a)The transfer to him of certain chattels owned by the partnership and family trust (Order 1.1);
b)The transfer to the wife of certain chattels owned by the partnership and family trust (Order 1.2);
c)Dissolution of the partnership, wind-up of J Pty Ltd, termination of the family trust and the auction sale of all remaining chattels of those entities (Orders 1.3, 1.4, 2, 3, and 4), followed by distribution of the net sale proceeds in the proportions of 65 per cent to the husband and 35 per cent to the wife, subject to the wife bearing sole liability for a debt due by her to the eldest child (Orders 5 and 6); and
d)The parties split the net proceeds of sale of “K” in proportions of 65 per cent to the husband and 35 per cent to the wife (Order 10).
[17] Order 3 made on 27 January 2012
[18] Exhibit H6
In support of his proposal the husband relied upon:
a)His affidavit filed on 22 June 2012;
b)His financial statement filed on 20 July 2012; and
c)The affidavit of his mother, Mrs W Frymann, filed on 10 July 2012.
The husband also pressed, but then withdrew, two separate applications to adduce fresh oral evidence relating to the ownership of chattels forming part of the matrimonial pool of property and the alleged evanescent separation in 2002.

Process of property adjustment

In determining the property adjustment orders that should be made between spouses the Court follows a recognised four-step process (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39]).
Firstly, the Court should identify and value the matrimonial pool of property, comprised of assets, liabilities and financial resources at the date of the hearing.
Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) of the Family Law Act 1975 (Cth) (“the Act”), and determine the contribution-based entitlements of each party as a percentage of the matrimonial pool of assets.
Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), and s 75(2) of the Act, and determine the adjustment, if any, that should be made to the contribution based entitlements of the parties.
Finally, the Court should consider the effect of those findings and resolve what order is just and equitable in all the circumstances of the case.

The matrimonial pool of property

The parties were ordered in January 2012 to file and serve a joint balance sheet well in advance of the trial.[19] Unfortunately they did not do so.
[19] Orders 6 and 7(a) made on 27 January 2012
A joint balance sheet was tendered in the early stages of the trial,[20] but it apparently remained the subject of controversy. Just prior to the commencement of final submissions the wife[21] and husband[22] each tendered individual balance sheets, which remained at some variance.
[20] Exhibit A
[21] Exhibit W2
[22] Exhibit H8
I find on the available evidence that the matrimonial pool of property comprises the following assets, liabilities and resources:

No.	Assets	Party	Value	Total
1	Net proceeds of sale of “K”	Husband	127,488
2	Net proceeds of cattle sales	Joint	2,684
3	Cattle owned by the partnership	Joint	241,200
4	Plant and equipment owned by both the partnership and J Pty Ltd (valued in aggregate)	NK	625,975
5	Partnership bank acc. # …010	Joint	28,528
6	Wife’s bank accounts (aggregated)	Wife	11,549
7	Husband’s bank acc. # …994	Husband	1,150
8	AMP policy	Husband	8,735
9	Household contents	Wife	6,000
10	Household contents	Husband	2,000
11	Business S	Wife	NK
12	Shareholding in J Pty Ltd (100%)	Husband	NK
13	Business “F Company”	Husband	NK
Sub-total	1,055,309+	1,055,309+
Liabilities
14	Loan over AMP policy	Husband	13,930
15	Loan due to Ms R Frymann	Wife	15,000
Sub-total	28,930	1,026,379+
Superannuation
16	Colonial Super	Husband	55,465
17	MTAA	Wife	15,917
18	OSF	Wife	1,587
Sub-total	72,969	1,099,348+
Net assets and resources (approx.)	1,099,348+

The final balance sheet differs from those propounded by the parties so it is necessary to explain some inclusions, exclusions and other anomalies.
J Pty Ltd (items 4 and 12)
The evidence about J Pty Ltd is unsatisfactorily jumbled.
For reasons which remain unexplained, the asset constituted by the husband’s sole shareholding in J Pty Ltd was not separately valued. Worse still, it was not even included in the husband’s balance sheet as an asset. J Pty Ltd holds legal title in many assets as trustee for the family trust, the beneficiaries of which enjoy equitable interest in those assets. The husband’s sole shareholding in J Pty Ltd therefore has value.
The value of the husband’s shareholding is capable of valuation via different methods, but it likely bears some resemblance to the asset-backing of J Pty Ltd. The value of J Pty Ltd’s individual assets and the quantum of its liabilities are irrelevant to these proceedings per se, because J Pty Ltd is a separate legal entity and not a party to the litigation. J Pty Ltd’s assets and liabilities can only bear upon the value of the relevant matrimonial asset, which is the husband’s shareholding in J Pty Ltd.
The value of the husband’s shareholding would likely encompass the value of J Pty Ltd’s assets, including its banking account with the Commonwealth Bank (account number …508 containing $4,639[23]) and would also likely take into account its debt to the parties’ eldest child ($127,277[24]), the existence and value of which debt was ultimately admitted by the husband.
[23] Exhibit H8, item 11
[24] Exhibit W2, item 29
However, it is erroneous to include in the matrimonial balance sheet that corporate bank account and liability as an individual asset and liability of the parties. It is not their asset and it is not their liability.
J Pty Ltd has other assets besides its bank account, but those other assets were not separately valued. Inexplicably, the parties’ caused or permitted a single expert witness to value the chattels of J Pty Ltd and the partnership compendiously (item 4).[25] Consequently, it is impossible to discern from the evidence which of those chattels belong to J Pty Ltd and which belong to the partnership. The partnership assets are matrimonial assets because they belong personally to the parties, but the assets of J Pty Ltd are not matrimonial assets.
[25] Exhibit H3
The upshot is that the parties have wrongly taken into account as matrimonial assets some of J Pty Ltd’s assets (item 4) and it is now impossible to ascribe an accurate value to the matrimonial asset in the form of the husband’s shareholding in J Pty Ltd (item 12).
Plant and equipment (item 4)
The plant and equipment was valued by a single expert. The relevant portion of the valuation was tendered.[26] The parties dispute the mathematical computation of the valuations of the individual chattels. The wife alleged the total was $626,250 whereas the husband alleged the total was $625,975. There is ambiguity about the proper calculation on the face of the exhibit. I adopt the value alleged by the husband because he will likely retain most of those chattels and his lower valuation is an admission against interest. In any event, the difference between the two calculations is de minimis.
[26] Exhibit H3
Wife’s bank accounts (item 6)
There was dispute between the parties about the current collective value of the credit balances in the wife’s bank accounts.[27]
[27] Exhibit W2, item 4; Exhibit H8, items 4-8
It was conceded for the wife that her tendered balance sheet duplicated accounts[28] and the sources of the husband’s values were not explained.
[28] Exhibit W2, items 4-5; Exhibit W1
The collective value attributed to the wife’s accounts in the matrimonial pool is drawn from the wife’s current bank statements.[29]
[29] Exhibit W1
Husband’s household contents (item 10)
The husband conceded the household contents in his possession are valued at $2,000, which is an admission against interest upon which the Court may rely. The chattels were not independently valued.
The wife, however, purported to ascribe a higher value of $6,000 to those chattels, consonant with the value of the household contents retained by her (item 9). The wife contended for a higher value because of the evidence she adduced about the husband’s conversion of chattels owned by the parties’ eldest child in April 2012.[30]
[30] Wife’s affidavit, pars 127-128
I reject that contention. Any chattels taken by the husband from the eldest child were chattels that belonged to the eldest child. They were not matrimonial chattels. If the eldest child wishes to recover property allegedly owned by her she is free to initiate a civil suit against the husband for conversion or detinue. In any event, there is no evidence at all about the value of the chattels allegedly taken by the husband from the eldest child.
Business S (item 11)
It is common ground the wife does and will retain Business S. For reasons which remain unexplained it was not valued. The wife apparently made no admission about its value and the parties did not indicate to the Court any agreement about its value. No questions were posed to either party in cross-examination about the Business S.
If the parties do not pursue the matter as an issue of significance it is not for the Court to do so. I will make orders that enable the wife to retain the Business S, but it will be regarded as having no material value.
F Company (item 13)
The husband, acting on behalf of J Pty Ltd, caused the sale of all F Company stock and shut the business down by December 2010.[31]
[31] Wife’s affidavit, par 180; Husband’s affidavit, pars 98-99
In early 2011 the husband re-commenced trading under the F Company business name operating from the same premises selling similar stock. However, the husband re-commenced the business as a sole trader with a different ABN.[32] It was not a continuation of the former business owned by J Pty Ltd, as the mother suspected.[33]
[32] Husband’s affidavit, pars 100-101 (first)
[33] Wife’s affidavit, par 182
The new business constituted an asset in the hands of the husband, but he failed to make any satisfactory disclosure about its financial performance.
The husband did admit his weekly income of about $200 from the business,[34] but he failed to declare the business as an asset[35] and he failed to produce a single document to verify the computation of his average weekly income from it. The reference to F Company in his most recent financial statement attributed ownership of the business to J Pty Ltd,[36] which was demonstrably false in the face of his affidavit evidence.
[34] Husband’s financial statement, par 11
[35] Husband’s financial statement, pars 38, 41, 43
[36] Husband’s financial statement, par 41
The husband failed to voluntarily disclose, either before or during the trial, any documents relating to the performance of F Company under his sole stewardship over the past 18 months. There were no balance sheets, profit and loss statements, Business Activity Statements, GST returns, tax invoices, purchasing records, sale ledgers, till rolls, or receipts. The husband said in cross-examination that taxation returns for the 2011 and 2012 financial years had not been prepared or submitted to the ATO.
However, upon demand during cross-examination, the husband produced a payroll statement and a GST return so such business records must exist. The husband employs at least two employees to work in the business and he said he had complied with his obligations to remit both Business Activity Statements and GST payments. It was also revealed in cross-examination that the husband was utilising some of J Pty Ltd’s equipment, such as a forklift, to conduct his new business.
In reliance upon discovered bank statements relating to the husband’s personal account the husband was cross-examined about certain deposits, which the husband conceded were payments by customers relating to the F Company business now conducted by him. The husband was impelled to admit receipt of two lump sums of $5,500 and $2,026.80 within the preceding week alone, which payments were made by customers for services rendered or goods sold by the husband through his new business.
Self-evidently, the business has some value to the husband. He would not continue to conduct it if it was unprofitable. Otherwise, he would close it down, just as he did before when acting as the agent of J Pty Ltd. It is quite impossible to assess the value of F Company as an asset because of the lacuna in the evidence. It is also difficult to accept the husband’s uncorroborated evidence about the cash flow it affords him in circumstances of improper disclosure.
Loan over AMP policy (item 14)
The wife contended this debt was raised by the husband against his AMP policy after separation and he retained sole use of the borrowed funds, meaning the debt should not be taken into account as a matrimonial liability. I reject the submission. The debt exists and so it will be taken into account, just as the wife’s debt to the parties’ eldest child is taken into account (item 15). There was no suggestion by either party that the other utilised the monies they borrowed unreasonably.
Superannuation (items 16-18)
The Court is generally exhorted to treat the parties’ superannuation entitlements separately from assets, but that need not necessarily be the case (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429). Neither party directly addressed the issue in submissions but, inferentially, they both treated superannuation interests as matrimonial assets. It is appropriate in the circumstances of this case to do so because the superannuation interests are only of modest value, they represent only a relatively small proportion of the pool, and the parties’ respective interests are not greatly disparate.
Add-backs
The wife contended that various amounts should be added-back to the balance sheet as expenditure enjoyed unilaterally by the husband[37] and the husband made the same argument in reverse about the wife.[38] I reject both parties’ arguments about the inclusion of notional add-backs against the other in the balance sheet.
[37] Exhibit W2, items 15 and 16
[38] Exhibit H8, items 19-22
Following separation the husband remained in control of the partnership and F Company activities and kept the income generated by those business activities. The wife received no profit, distribution or wages from those businesses after separation, which occurred nearly three years ago.
In that context the wife intermittently made withdrawals from the bank accounts of J Pty Ltd and the partnership, to which she still had signatory access. She also retained and spent a GST refund payable to the partnership. She also received sale and insurance proceeds paid in respect of two horses which had earlier been acquired with partnership funds.[39] All of that money was spent by her on living expenses.
[39] Wife’s affidavit, pars 208-223
The mother also retained a Nissan vehicle which was owned by J Pty Ltd. That vehicle was traded-in on the car currently in the wife’s possession. The wife also retained a horse float owned by J Pty Ltd, which was sold to fund the purchase of the horse float currently in the wife’s possession.
Similarly, the husband continued to sell livestock as an incident of his continued conduct of the partnership. The wife admitted the need for him to sell livestock from time to time as an integral part of the partnership business. Earlier this year he received proceeds of more than $33,000 for the sale of livestock, which he kept. In late 2010 the husband sold some shares which had been acquired during cohabitation and kept the sale proceeds of more than $18,000. It was implicit from the husband’s evidence that he spent that money on living expenses and the continued conduct of the various businesses.
The mere fact that a party has expended money realised from assets that existed at the time of separation, without more, does not justify notional add-back of the expended funds. There is no appropriate basis for notionally adding back to the pool monies or assets that existed at separation but which have been subsequently spent or dissipated on meeting reasonably incurred necessary living expenses. The parties are not required to go into a state of suspended economic animation once they separate pending the resolution of their financial affairs. Parties are entitled to continue to provide for their own support, and are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives (see Chorn & Hopkins (2004) FLC 93-204 at [24]). None of the parties’ expenditure was properly characterised as expenditure upon legal fees, premature distribution of assets or wanton waste, which are the recognised categories for notional add-back (see AJO & GRO (2005) FLC 93-218 at [39]-[47]).
Loans
Evidence was adduced by the husband and his mother of monetary advances made by the husband’s mother to or for the benefit of the parties, which the husband and his mother sought to characterise as loans. Ultimately, the husband abandoned any contention that such advances were loans for which he and/or the wife remained indebted to his mother. However, such monetary advances remained relevant as contributions for which the husband was entitled to credit. That issue will be addressed below.

Assessment of contributions

At the commencement of cohabitation the wife owned about $1,000 in savings, a motor vehicle and the household chattels which furnished the flat she was then renting. The wife denied her car was encumbered. Although the wife alleged she then owned a Mazda car,[40] she admitted in cross-examination it was not actually acquired until after the commencement of cohabitation. It was purchased from the husband’s sister, as the husband deposed.[41]
[40] Wife’s affidavit, par 40; Husband’s affidavit, par 8
[41] Husband’s affidavit, par 40
The husband owned various chattels at the commencement of cohabitation, including,[42] some household chattels, a part interest in a Ford utility, some livestock, a part interest in a truck, and a part interest in a stock crate. The husband’s share in the stock crate was then worth about $26,000.
[42] Wife’s affidavit, par 72; Husband’s affidavit, pars 9-16
The husband also had a superannuation interest then worth at least $15,000[43] but not more than $18,000.[44]
[43] Wife’s affidavit, par 72
[44] Husband’s affidavit, par 17
It is impossible on the evidence to compare the parties’ initial contributions mathematically, but the husband’s contributions were clearly superior.
Despite some apparent reluctance by the parties to admit it, I am satisfied the parties each always worked to the very limit of their capacities to advance the family interests.
The wife worked incredibly hard to support the two children through their injuries and illnesses. She spent large amounts of time away from the family home at hospitals for that purpose. During 2001 and 2002 the eldest child was in a coma in Newcastle for approximately three months and then spent about another 15 months in rehabilitation in both Sydney and Town W.[45] The wife spent much of that time with her. The wife also attended hospital with the child on more than 100 occasions for his treatment between 2002 and 2011.[46]
[45] Wife’s affidavit, pars 8, 18, 21, 60, 106
[46] Wife’s affidavit, pars 12, 60, 62, 132-145, 152, 159, 165; Husband’s affidavit, par 72
The wife was principally responsible for the care of the children and the performance of domestic duties,[47] but while the wife was away from the family home with one of the children the household and the other children were managed by the husband and his mother.[48] The wife conceded in cross-examination the husband “filled the gap” at home while she was away. The husband also travelled to attend the hospitals from time to time and helped with domestic duties even when the wife was at home.[49]
[47] Wife’s affidavit, pars 98-101, 103, 114
[48] Wife’s affidavit, par 21
[49] Husband’s affidavit, pars 52, 72, 78
The husband’s time was principally devoted to the derivation of income to support the family. He too worked extremely hard in that capacity. The mother conceded he worked long hours, approximating 70 hours per week.[50] The husband was principally concerned with the conduct of the parties’ farming partnership on several different rural properties[51] and then later also the F Company retail business.[52]
[50] Wife’s affidavit, par 73
[51] Wife’s affidavit, pars 202-205; Husband’s affidavit, par 85, 89
[52] Husband’s affidavit, par 85
The wife also worked to earn income for the family, sometimes within the family businesses and sometimes for other employers. Her income-producing work was undertaken at times around her own ill health, the birth and care of the children when they were young, and her commitment to their medical care with injury and illness when they were older.
In the early stages of the parties’ relationship the wife worked in administrive support.[53] In about 1996 the wife returned to part-time work in financial services.[54] She then moved to full-time work as an administrative assistant for a small business in 1998 and also worked as a part-time administrative assistant for a local organisation that same year.[55] She ceased that employment with the small business in 2000 and then worked part-time for a rural business until the eldest child’s accident in 2001.[56] In January 2003 the wife sought out book keeping work to supplement the family income.[57] The wife also assisted the husband with farm work and bookkeeping when she was able.[58]
[53] Wife’s affidavit, pars 40-50; Husband’s affidavit, par 36
[54] Wife’s affidavit, par 51
[55] Wife’s affidavit, pars 53-54
[56] Wife’s affidavit, pars 57, 59
[57] Wife’s affidavit, par 64
[58] Wife’s affidavit, par 97; Husband’s affidavit, pars 77, 97
During 2004 the parties conceived J Pty Ltd, the family trust and F Company.[59] The husband continued to conduct farming activities for the partnership and both parties actively worked at F Company.[60] The parties were struggling financially at that point in time, which was the impetus for the establishment of F Company, but the business took some time to develop.
[59] Wife’s affidavit, par 66
[60] Wife’s affidavit, pars 67, 70, 78, 171; Husband’s affidavit, par 80
During 2005 the wife and J Pty Ltd borrowed money from the compensation funds owned beneficially by the eldest child.[61] The husband alleged he was unaware of the loans at that time but I accept the evidence of the wife that he was aware. The husband was impelled to admit in cross-examination that he was contradicted and the wife was corroborated by the financial records of J Pty Ltd and the family trust, which recorded loans owing to the eldest child of not less than $145,476 from the 2006 financial year onwards. The husband finally conceded the loans existed and that both J Pty Ltd and the wife remained indebted to the eldest child in the separate amounts alleged by the wife.
[61] Wife’s affidavit, par 92
In 2006 and 2007 further monies were borrowed commercially from various banks and secured against the husband’s title to “K”.[62] It is unclear from the evidence whether the monies were borrowed by the parties jointly or individually, by the partnership, or by J Pty Ltd, but it is unnecessary to decide since the debts were discharged upon the sale of “K”.
[62] Wife’s affidavit, pars 91 (x2)
The need for such borrowings is explained, despite the husband’s refusal to accept it, by the poor financial performance of the partnership and F Company. For all the parties’ tireless effort, their partnership barely showed a profit from 2006 onwards, the husband’s personal tax returns disclosed paltry income, and the wife’s tax returns even disclosed she was unpaid during periods when it was common ground she was employed by J Pty Ltd and working at F Company.[63]
[63] Wife’s affidavit, par 171

Whatever income was earned by the parties in their various endeavours was contributed in totality for the benefit of the family. There was no contention by either party otherwise.
Even following separation the wife continued to work with the husband at F Company, despite the tension between them,[64] and despite the evidence proving she was not then being paid a wage. Eventually that situation became untenable and the mother left F Company to work in finance services.[65]
[64] Wife’s affidavit, pars 171-173
[65] Wife’s affidavit, pars 171, 174-178
For all but a few years of the parties’ relationship they and their children were permitted to live upon “K” free of charge in return for the husband’s continuing assistance to his parents in their own farming activities. “K” was ultimately gifted to the husband in 2005, at which time he ceased working for his parents.[66] The wife regarded that gift as the husband’s inheritance from his deceased father.[67]
[66] Wife’s affidavit, par 77
[67] Wife’s affidavit, par 78
After the family moved into the eldest child’s home in Town N, “K” was rented and generated some income for the family[68] until it was eventually sold for $725,000, subject to encumbrances.[69]
[68] Wife’s affidavit, pars 149-151
[69] Husband’s affidavit, par 101 (second)
In 2005 and 2008 the parties’ partnership was benefitted by gifts of cattle from either the husband’s father, his deceased estate, or entities formerly controlled by him.[70] The evidence does not permit quantification of the value of those gifts, but the number of cattle involved suggests the gifts were reasonably substantial.
[70] Husband’s affidavit, par 90
In 2008 the paternal family made a further gift of property which benefitted the parties. This time the gift was farming equipment and the gift was again made to the partnership. The equipment was then valued at $84,835.30.[71]
[71] Wife’s affidavit, pars 79-80; Husband’s affidavit, par 91; Exhibits H1 and H2
During the course of the parties’ relationship the husband’s mother also gave the parties cash amounts from time to time to assist them,[72] which the husband finally conceded were gifts rather than loans.
[72] Wife’s affidavit, par 102; Husband’s affidavit, par 102 (first); Affidavit of W. Frymann
The husband submitted all of those financial benefits afforded by his family to the parties should sound in his unilateral favour as indirect contributions (see Marriage of Kessey (1994) FLC 92-495 at 81,149-81,150). While the husband should undoubtedly be credited significantly for such contributions, the issue is not as uncomplicated as the husband suggested.
The husband continued to undertake farming work for the benefit of his parents after the parties began cohabitation. He was paid a paltry wage, but additionally received the benefit of cost-free accommodation on “K”, free meat and free fuel. The husband agreed those benefits were a “package” as consideration for the work he did for his parents. The benefits were not conferred gratuitously. The wife contributed indirectly to the receipt of those benefits by maintaining the household and caring for the children, while the husband laboured for his parents, and she undertook other paid employment to meet expenses of the parties that required payment in monetary form.
The wife gave uncontradicted evidence that she was admitted as a partner into the partnership of the paternal family in 1990,[73] so contributions made directly by that partnership for the benefit of the parties were the subject of partial contribution by the wife.
[73] Wife’s affidavit, par 75
Gifts which emanated from the husband’s family and were conferred upon the partnership were gifts conferred jointly upon the parties, not just the husband, because the parties were equal partners in the partnership. Even following separation, the monetary gifts made by the husband’s mother were sometimes made to the wife alone or the parties jointly, not just to the husband. Inferentially, there was an intention to confer benefit on both parties, not the husband alone.
I accept the wife’s submissions that those considerations ameliorate to some extent the credit for contributions that might otherwise extend to the husband under Kessey principles.
The wife openly propounded a submission that her contributions attracted greater weight because of the arduous conditions, caused by the husband’s oppression, under which she made her contributions (see Marriage of Kennon (1997) 22 Fam LR 1).
In Kennon the majority stated (at 24), without dissent (at 66-67):
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s 79.
In the above formulation, we have referred only to domestic violence, for the reasons which we indicated earlier, but its application is not limited to that…
However, it is important to consider the “floodgates” argument. That is, these principles, which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this Court to fault and misconduct in property matters – a circumstance which proved so debilitating in the past…
However, in our view, s 79 should encompass the exceptional cases which we described above…
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had discernable impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass…conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).
The Full Court also adopted (at 18) the views of the trial judge to the effect that in the absence of any evidence linking impaired state of health of a party with the nature and quality of contributions made by that party there is no basis for finding the party should receive an adjustment for that factor.
In March 2002 there was an abusive incident between the parties.[74] I accept the wife’s evidence about it because she staunchly adhered to her version of the incident and the husband said he had no recollection of it. The husband said “I don’t remember – plain and simple”. Although there was no physical violence, the husband used profane and threatening language towards the wife.
[74] Wife’s affidavit, pars 22-26
Another abusive incident occurred between them in August 2009. The husband admitted a heated physical altercation occurred, but the mother alleged the husband attacked her, held his hands around her throat, and had to be restrained.[75] The husband admitted only that he placed his hands upon the wife’s shoulders, “pulled” her out of the youngest child’s room and “shoved” her aside. The wife’s version of the event is more probably correct. She immediately left the home and contacted police, to whom she made a contemporaneous statement about the incident. An interim family violence order was issued but was later dismissed when the parties reconciled and the mother informed police that she no longer needed the protection of the order.
[75] Wife’s affidavit, pars 29-32
The wife was challenged in cross-examination about those being the only two frank incidents which could conceivably amount to domestic violence. The wife admitted there was otherwise no physical violence but said “there was verbal and emotional abuse”, which is much the same as she told the police some time after separation in December 2010.[76]
[76] Wife’s affidavit, Annexure E, par 5 (page 61)
The motivation for the wife’s visit to police in December 2010 was a report she received from a mutual acquaintance of the parties to the effect the husband had threatened to confront her at work and “break [her] neck”, by which she was understandably frightened.[77] The husband admitted in cross-examination he had made comments to the acquaintance of a similar but not identical nature, but he said his remarks were merely sarcasm.
[77] Wife’s affidavit, Annexure E, pars 6-7 (pages 61-62)
The husband has treated the wife with disdain since his realisation that the marriage is at an end. Whilst the parties worked together at F Company following separation the husband left notes for the wife addressing her as “hoare” (sic).[78] The husband even sent correspondence to the wife’s new employer some two years after separation referring to the wife as a “hoare” (sic).[79] The husband admitted doing so.
[78] Wife’s affidavit, par 173
[79] Wife’s affidavit, par 174
On the basis of the evidence adduced I am not satisfied the wife’s contributions were rendered “significantly more arduous” as a consequence of the husband’s conduct for a number of reasons.
Importantly, there was no expert evidence that the wife actually even suffered any pervasive impaired state of emotional health. Even if she did it might well have been attributable to her grief at the misfortune of ill health, injury and death within the family. There was no evidence, expert or lay, which reasonably bore upon the alleged causal relationship between violent conduct of the husband, any impaired state of health on the part of the wife, and her contributions being rendered qualitatively greater because of that adversity. It is not permissible to simply speculate about those facts and the links between them.
The only frank incident of aggression between the parties prior to the time of their separation occurred in March 2002. There was no overt violence at that time, although the husband was belligerent and overbearing.
The wife’s generalised complaint of “verbal and emotional abuse” throughout the relationship cannot be accorded any real weight when she failed to adduce any evidence to elaborate her opinion. It is one thing to state a generalised opinion, but quite another to vindicate the opinion with reliable objective evidence. I have little doubt that, in retrospect, the wife’s opinion about her oppression by the husband is honestly held, but that does not make her opinion objectively true.
The single incident of physical violence occurred in August 2009, just prior to the parties’ final separation in October 2009. No doubt the relationship was fraught as it disintegrated. Marital separation is often attended by heightened emotions and uncharacteristic outbursts of temper. That incident, which occurred only weeks prior to separation, could not logically have impinged upon the wife’s marital contributions over the preceding 23 years. Rather, it was “conduct related to the breakdown of the marriage”, which the Full Court expressed to be irrelevant to application of the Kennon principles.
Regrettably, the extent of the matrimonial pool remains elusive for two reasons – the husband’s failure to make proper disclosure in relation to his new business and uncertainty about the value of the husband’s sole shareholding in J Pty Ltd.
The value of the husband’s new business and the true extent of the income stream it affords him remain unknown. The wife argued extra provision should therefore be made for her on account of the husband’s failure to make proper disclosure. It was asserted that, because of the inexcusable non-disclosure, more generous provision for her was warranted in the property adjustment orders (see B & K (1992) 15 Fam LR 343; Weir & Weir (1992) 16 Fam LR 154). Where there is clear evidence of deliberate non-disclosure the Court should not be unduly cautious in making findings in favour of the innocent party, and the Court then has jurisdiction to make an order going beyond the identified property (see Weir & Weir at 158-160; C v S (2002) 29 Fam LR 406 at 422-424).
That submission attracts weight, but a countervailing consideration is the concern about the valuation of the husband’s shareholding in J Pty Ltd. While it is known on the evidence that J Pty Ltd has an undefined quantity of chattels and a small bank account, which the parties mutually included in their respective balance sheets,[80] it also has a large liability to the parties’ eldest child, and there was dispute as to whether that liability would feature on the balance sheet.[81]
[80] Exhibit W2, items 3 and 6; Exhibit H8, items 3 and 11
[81] Exhibit W2, item 29; Exhibit H8
J Pty Ltd’s liability to the eldest child should be repaid. The wife desired it and the husband conceded it. Compelling the parties to exercise their powers as directors to ensure J Pty Ltd’s payment of the debt will likely have a significant effect upon the husband’s share of matrimonial property if he is to retain his shareholding in J Pty Ltd as part of the overall adjustment.
The probable curtailment of the value of the husband’s interest in J Pty Ltd off-sets the liberal assessment of the wife’s entitlement that would otherwise be justified because of the husband’s non-disclosure.
The wife contended that her contribution-based entitlement to the matrimonial pool was properly measured at 45 per cent, whereas the husband contended his contributions were far greater and warranted calculation of his entitlement to the pool at 65 per cent.
I am satisfied the husband’s overall contributions were greater than the wife’s, as the parties agreed, but not by nearly double. The proper quantification of the parties’ contribution-based entitlements is 57.5 per cent to the husband and 42.5 per cent to the wife. An amount of 15 per cent is an appropriate measure of the differential.
The factors which account for that differential are the husband’s slightly greater initial contribution of assets and the substantial gifts that originated from the husband’s family. The parties’ contributions as breadwinners and homemakers were equivalent. They each devoted all of their available time to the advancement of the family unit and can be justifiably proud of their efforts in the face of such adversity. The assessment is also influenced by the issues of uncertainty surrounding the compilation of the balance sheet which have already been explained.

Adjustment

The husband is 52 years of age and the wife is 48 years of age.
There was no evidence the husband suffered from any illness or injury which impaired his income earning capacity. The husband pursues his farming and retail activities. There is no suggestion on the evidence that will change any time soon. His income earning capacity is no less than that of the wife. The financial history about which he was cross-examined would suggest his income earning capacity is also no greater than that of the wife, but uncertainty still surrounds his F Company business and the income it generates.
Although the wife has previously been afflicted by ill-health, the evidence suggests that last occurred in 1994. There is no evidence of any current illness or ill health that impairs her income earning capacity. The wife currently pursues paid work as both an employed office manager and a self-employed cleaning services provider.[82]
[82] Wife’s affidavit, pars 232, 234
Although the second child lives with the wife,[83] she is an adult and is not dependent upon the wife. It was conceded in cross-examination that the second child was the sole beneficiary of the deceased estate of the youngest child, as a consequence of which she received approximately $90,000, and is now self-supporting. She also works and derives her own income.
[83] Wife’s affidavit, par 233
The husband has accrued superannuation entitlements of slightly greater value than the wife, but the difference is immaterial. The wife abandoned her pursuit of superannuation splitting orders and did not suggest the husband’s greater superannuation interest was a basis for any adjustment in her favour.
I accept the submission of the husband that there should be no adjustment in favour of either party.
The wife submitted for an adjustment in her favour of 10 per cent, but the submission was only faintly made. She candidly conceded it was a bold submission. Other than those considerations already discussed, there were no other factors relied upon by the wife to justify any adjustment in her favour.

Just and equitable orders

The 42.5 per cent share of the known pool to which the wife is entitled is quantified at $467,223 (to the nearest dollar). Conversely, the husband’s 57.5 per cent share computes to $632,125 (to the nearest dollar).
There is no real estate in the matrimonial pool. Both parties rent accommodation and will use their shares of the pool to provide for their future accommodation.
The parties will retain their own superannuation interests. The husband sought no superannuation splitting order and the wife abandoned her proposal for any such order.
Consequently, only interests in items of personalty and liabilities remain to be adjusted between the parties.
The orders provide for the wife to receive certain assets (items 1, 2, 5, 6, 9, 11), liabilities (item 15) and resources (items 17 and 18).
The orders also provide for the wife to receive some specified chattels (which form part of item 4), the uncontroversial collective value of which chattels is $63,000.[84] The parties agreed the wife should have at least four of the five items she desired.[85] There is no point served arguing over the fifth. The husband did not cross-examine the wife about the unreasonableness of her desire to also have that fifth item.
[84] Exhibit H6, last page; Exhibit H3, first page
[85] Exhibit H6, Schedule 2; Second Amended Application 10/4/12, Lists 1 and 2
The net value of the property retained by the wife is $241,753. For the wife to receive her full entitlement she needs to receive a cash adjustment of $225,470 (= 467,223 – 241,753). The orders therefore require the husband to pay to the wife $225,470.
The orders permit the husband 60 days within which to marshal his affairs in order to make that payment, in default of which enforcement provisions apply.
The husband needs to raise money to pay out the wife. He may do that by borrowing money or selling assets. Pending payment to the wife the husband is not permitted to deal with the assets under his control in a manner that diminishes their equitable value, other than for the express purpose of raising money to make the payment to the wife.
If the husband does not, or cannot, make payment to the wife then the wife is vested with control of all assets so she may sell the assets without interference from the husband and use the sale proceeds to achieve the equitable distribution of matrimonial assets.
The husband proposed orders which required the collation and sale of all matrimonial assets with proportional division of the proceeds. That is an unattractive proposition for reasons advanced by the wife.
The husband has had effective unilateral control of both J Pty Ltd and the partnership since separation. The wife was dissatisfied with the circumstances under which the husband terminated the F Company business owned and conducted by J Pty Ltd in late 2010 and then shortly thereafter reconstituted a similar business in his own right using the same trading name, same premises, some of J Pty Ltd’s equipment, and similar stock. The wife was also dissatisfied with the transparency of that process, which remains quite opaque because of the husband’s failure to give proper disclosure.
There was no dispute about the value of the cattle, plant and equipment resting in the hands of J Pty Ltd and the partnership (items 3 and 4), which property constitutes the bulk of the matrimonial pool. The Court is therefore able to implement orders attributing assets between the parties with confidence about the value of such assets. There is no need to introduce the inherent delays and uncertainties of sales and the taking of accounts.

The husband’s retention of those assets, subject to cash adjustment in the wife’s favour, recognises the fact of his uninterrupted control of those assets over the years since separation and will also permit him to keep the assets which form the core of his continuing business activities so as to preserve his income stream.
The parties’ conflict appears to have heightened rather than abated in recent times. Making orders of the sort proposed by the husband, which would necessarily entail their close co-operation in the engagement and instruction of stock agents and accountants, would be bound to stimulate further conflict.
The husband desired his retention of some cattle and the sale of other cattle.[86] Such an order is not practicable since the wife may not accept the husband’s identification of the sub-set of cattle he wants to keep from the herds of cattle the partnership owns.[87] It is more attractive to make orders permitting the husband’s retention of all cattle, plant and equipment. He can then choose what to do with that property.
[86] Exhibit H6, Schedule 1
[87] Exhibit H7
Subject to compliance with the orders, the husband will receive certain assets (items 3, 4, 7, 8, 10, 12, 13), liabilities (item 14) and resources (item 16), allowing for the transfer to the wife of several items worth $63,000 (from item 4). The net value of the property to be retained by the husband is therefore not less than $857,595. The unknown values of his shareholding in J Pty Ltd and his F Company business preclude certainty about the overall value of his entitlement.
The husband’s proper share of the known matrimonial pool is quantified at $632,125. His payment of $225,470 to the wife will cause him to retain his proper share of the known pool (857,595 – 225,470 = 632,125).
The orders also deal with the money owed by J Pty Ltd to the parties’ eldest child. As earlier mentioned, the husband conceded J Pty Ltd remained indebted to the eldest child for the sum of $127,277. The orders require the parties, in their capacity as directors, to cause J Pty Ltd to pay those monies to the child in discharge of the debt. If the payment is not made and the enforcement orders are invoked, provision is made for the wife to cause J Pty Ltd to pay that debt from proceeds realised from the sale of its assets. Neither party expressly sought orders to that effect, but the wife’s expectation of J Pty Ltd’s payment of the debt was implicit from her inclusion of the debt in the balance sheet she tendered[88] and the indemnity she sought from the husband against it.[89]
[88] Exhibit W2, item 29
[89] Second Amended Application 10/4/12, Order 11
By implication, the parties do not foresee any problem with an order which indirectly requires J Pty Ltd to pay its debt to their daughter. Even though J Pty Ltd was not joined as a separate party to the proceedings, neither party envisaged any difficulty soliciting orders from the Court compelling them to act in their capacity as directors to ensure that J Pty Ltd acted in certain ways, even to its corporate detriment.[90]
[90] Exhibit H6, Orders 1, 2, 5, and 6; Second Amended Application 10/4/12, Orders 1(c), 4(c)
The order which requires the parties to cause J Pty Ltd to pay $127,277 to the eldest child will thereby reduce the value of J Pty Ltd and hence the value of the husband’s shareholding in it. However, the impost is ameliorated by the unknown true value of his shareholding in J Pty Ltd (item 12) and the undisclosed value of his F Company business (item 13). It also accounts for why the wife’s entitlement to the matrimonial pool has not been assessed more liberally, for reasons already explained.
The orders make provision for immediate dissolution of the partnership.
Although not addressed by either party, the Partnership Act 1892 (NSW) applies even though the Court is exercising federal jurisdiction (see s 79 Judiciary Act 1903 (Cth)).
The partnership was most likely constituted by a deed of partnership prepared for the parties in Sydney.[91] Therefore, written notice was required to terminate the partnership (s 26(2) of the Partnership Act). Termination could not be inferred from the conduct of the parties. There is no evidence either party ever gave written notice to terminate the partnership, in which event it still subsists.
[91] Husband’s affidavit, par 76
The Court is empowered to order dissolution of the partnership, subject to proof of certain conditions (s 35 of the Partnership Act). Inferentially, because it was not expressly addressed, the only basis upon which the wife sought an order dissolving the partnership is that it would be just and equitable to do so (s 35(f) of the Partnership Act).
I am satisfied on the evidence it would be just and equitable to dissolve the partnership. The parties are estranged, cannot conduct the business of the partnership co-operatively and the husband has had unilateral control of the partnership affairs for nearly three years.
The wife proposed an order declaring that the partnership is deemed dissolved as from 30 June 2012.[92] I decline to make an order in those terms in the absence of submissions about the power and appropriateness of the Court making an order for dissolution with retrospective effect. The order dissolving the partnership therefore has prospective effect. It was always open to the wife in the past to give written notice of her termination of the partnership had she wished to do so.
[92] Second Amended Application 10/4/12, Order 3
The orders require the husband to indemnify the wife against any civil liability she accrues as a partner in the partnership or as a director of J Pty Ltd which may arise from the failure of the partnership and J Pty Ltd to comply with taxation and regulatory obligations. The evidence disclosed those entities have only filed taxation returns up to and including the financial year ended 30 June 2010. The indemnity therefore applies from 1 July 2010 and, if the enforcement orders ever have operation, the indemnity ceases on invocation of those orders because the wife will then be in sole control of J Pty Ltd.
The issue of loans being due to the husband’s mother dissipated, but for abundant caution the husband is ordered to indemnify the wife against any alleged liability of the parties to his mother.
The wife is required to indemnify the husband against the debt of $15,000 she individually owes to the parties’ eldest child.
I am satisfied the orders set out at the commencement of these reasons are just and equitable.

I certify that the preceding one hundred and forty eight (148) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 7 August 2012.

Associate:

Date: 7 August 2012

[2012] FamCA 640

7 August 2012

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