GOODWIN & GOODWIN
[2020] FamCA 999
•27 November 2020
FAMILY COURT OF AUSTRALIA
| GOODWIN & GOODWIN | [2020] FamCA 999 |
| FAMILY LAW – PROPERTY SETTLEMENT – Applications by the parties for the alteration of property interests – Marriage of 13 years – Farming property – Significant contributions from each party’s parents – Husband worked on parent’s farm for share of income rather than fixed wage – Wife worked off the farm – Parties separated 5 years prior to trial – two children who live with each parent for equal time – Husband has expectation of inheriting part of his parent’s farming enterprise – Husband’s parents still actively farm their property – Orders made for division of property – Just and equitable. |
| Family Law Act 1975 (Cth) ss.75(2), 75(2)(o), 79(4)(a), 79(4)(b), 79(4)(c) |
| Stanford & Stanford [2012] HCA 52 |
| APPLICANT: | Ms Goodwin |
| RESPONDENT: | Mr Goodwin |
| FILE NUMBER: | ADC | 3115 | of | 2016 |
| DATE DELIVERED: | 27 November 2020 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Mead J |
| HEARING DATE: | 23 & 24 September 2019 and 15 November 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Richards of Counsel |
| SOLICITOR FOR THE APPLICANT: | Duncan Basheer Hannon |
| COUNSEL FOR THE RESPONDENT: | Mr Dillon of Counsel |
| SOLICITOR FOR THE RESPONDENT: | Douglas Hoskins Legal |
Orders
That within seven (7) days of today’s date the parties Counsel provide to the Associate to Justice Mead by way of jointly signed email correspondence a draft minute of order with respect to settlement of property encompassing the proposed orders referred to in paragraphs 227 to 245 respectively.
Directions with respect to the making of the orders in terms of reasons delivered this day be adjourned to 8 December 2020 at 9.00 am.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Goodwin & Goodwin has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 3115 of 2016
| Ms Goodwin |
Applicant
And
| Mr Goodwin |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr and Ms Goodwin are unable to agree on a division of their property. At the time of trial they were both aged 43 years.
The parties’ commenced cohabitation in February 2001, married later in 2001 and separated in August 2014. There are two children of the marriage Y born in 2003 and Z born in 2007.
Final consent orders were made by Judge Brown with respect to parenting matters on 16 November 2016. The parties have equal shared parental responsibility for Y and Z and the children live with each of the parents on a week about arrangement.
At the time of trial the applicant wife was employed as healthcare professional and the respondent husband a farmer.
Orders sought
At trial the applicant wife sought that the non-superannuation asset pool be apportioned as to 65 per cent to her and 35 per cent to the husband. She further sought that each party retain their existing superannuation entitlements.
The husband sought that the parties’ non-superannuation asset pool be apportioned as to 60 per cent to him and 40 per cent to the wife. He proposed an adjustment to the wife’s superannuation fund to effect an equalisation of their respective superannuation entitlements.
History of court proceedings
The wife’s Application for settlement of property was filed in the Federal Circuit Court of Australia on 19 August 2016. At that time she sought by way of a final order that the net non-superannuation assets of the marriage be divided 60/40 in her favour and that each party retain their respective superannuation entitlements.
In the husband’s Response filed 16 September 2016 he sought orders with respect to parenting issues as well as property settlement. He proposed that he retain the parties’ farming property, pay to the wife the sum of $100,000 and that the parties’ superannuation entitlements be equalised by way of an adjustment in his favour from the wife’s superannuation entitlements.
The parties attended at a conciliation conference with a Registrar on 16 February 2017 but were unable to resolve the matter.
On 15 March 2017 Judge Brown listed the matter for final hearing before him on 8 and 9 February 2018, later varied to 22 and 23 February 2018. The wife’s Trial Affidavits were ordered to be filed and served on or before 10 January 2018 and those of the husband on or before 24 January 2018. The parties complied with those orders, albeit a few days late in each instance.
On 8 February 2018 the wife filed an Application in a Case seeking that the trial listing for 22 and 23 February 2018 be vacated and that she be granted leave to join the husband’s parents and B Pty Ltd as respondents in the proceedings.
She sought an order permitting her to file an Amended Initiating Application seeking:
·a declaration that the parents hold their interest in farming property at Property A on constructive trust for the parties;
·that they hold half of the assets of B Pty Ltd on trust for the parties;
·an order that the husband’s parents transfer the whole of their estate and interest in Property A to the parties; and
·that the husband’s parents in their capacity as directors and shareholders of B Pty Ltd cause that company to do all things necessary to cause the company to transfer one half of its interest in plant, equipment and stock as well as other assets of the company to the parties.
The Application was listed for hearing before Judge Brown on 15 February 2018.
On 19 February 2018 His Honour ordered:
·a vacation of the trial dates of 22 and 23 February 2018;
·that the husband’s parents file any Response and Affidavit in respect of the joinder application within 28 days; and
·that the matter be fixed for further interlocutory hearing regarding the joinder application and the possibility of a transfer of the proceedings to the Family Court of Australia on 3 May 2018.
His Honour reserved the costs of the Application and thrown away in respect of the adjourned trial.
On 11 April 2018 the husband’s parents Mr Goodwin Snr and Ms Goodwin Snr filed a Response to the Application in a Case filed by the wife on 8 February 2018 seeking that the said Application be dismissed and that they have the costs of the Response and attendance at Court on 3 May 2018.
On 3 May 2018 Judge Brown transferred the matter to the Family Court of Australia and listed the issue of costs for argument before him on 18 June 2018.
After an adjournment request and ongoing negotiations, Judge Brown made an order in chambers by consent on 6 September 2018 fixing the husband’s costs in an amount of $8,484 to be paid to him contemporaneously with the final determination of the proceedings between the parties.
On 6 July 2018 Justice Berman adjourned further consideration of the matter generally for mention to 2 August 2018, reserved the costs of the parties and the husband’s parents Mr and Ms Goodwin Snr and noted in a preamble to the order:
…that unless the wife files an Amended Initiating Application which joins Mr Goodwin Snr, Ms Goodwin Snr and/or B Pty Ltd there is no need for their further involvement in the proceedings.
On 28 August 2018 the wife filed an Amended Initiating Application seeking final orders in the following terms:
(1)An order by way of property settlement or alteration of interests in property pursuant to Part VIII of the Family Law Act 1975 as amended, that the property of the applicant and the respondent be divided between them in equal shares.
(2)A declaration that Mr Goodwin Snr and Ms Goodwin Snr hold their interests in:
(2.1) the farming property being Property A;
AND
(2.2)the farming stock, plant and equipment held by them in the partnership styled “[Mr & Ms Goodwin Snr]”,
in whole or in part on constructive trust for the applicant and respondent herein.
(3)Such further or other relief as the Court deems fit including such relief as is necessary to give effect to the interest of the applicant and the respondent by way of constructive trust over Property A and the partnership “[Mr & Ms Goodwin Snr]”.
On 18 September 2018 Registrar Paxton ordered the wife to file and serve particulars of claim on or before 30 October 2018. She further ordered that the husband and the third parties file and serve any responding documents to those particulars on or before 27 November 2018 and adjourned the directions hearing to 18 December 2018 before herself. On that day the matter was further adjourned for directions to 26 February 2019. An order was also made referring the proceedings to the list of matters awaiting trial allocation.
On 17 December 2018 the husband’s parents filed an Application in a Case seeking that the wife provide further and better particulars addressing matters set out in a letter from the husband’s parents solicitors to the wife’s solicitors dated 11 December 2018.
On 26 February 2019 that Application was listed to the first day hearing.
The matter first came before me on 21 May 2019. It was listed for trial at 10.00 am on 23 September 2019 and orders were made for:
·the filing of Trial Affidavits;
·a schedule of costs to the date of trial and anticipated for trial to be available at the commencement of the hearing; and
·summaries of argument.
The parties had filed their original Trial Affidavits in accordance with orders of Judge Brown on, in the case of the wife, 17 January 2018 and in the case of the husband, 2 February 2018. Those documents predated the wife’s Amended Initiating Application and the involvement of the husband’s parents.
On 17 September 2019 the Court was requested to make an order in chambers with the consent of all parties in the following terms:
(1)That the Applicant’s claim against the Second and Third Respondents including Orders 2, 3, 4 and 5 of the Applicant’s Further Amended Initiating Application dated and filed on 9 August 2019 be dismissed.
(2)That the Applicant and Second and Third Respondents bear their own costs.
It was unfortunate that by then the hearing of the matter had been delayed by some 18 months.
The matter finally came before the Court on each of 23 and 24 September and 15 November 2019. On that day judgment was reserved. I apologise to the parties for the delay in the delivery of this judgment.
Background
It was common ground that the total period of the parties’ cohabitation was 13.5 years and that at the commencement of cohabitation they were both in receipt of modest wages, the wife working as a healthcare professional and the husband as a diesel mechanic.
The parties commenced their relationship in November 1996. In January 2001 they purchased the property at E Street, F Town.
The husband continued working as a tradesman for G Business until November 2003. The wife continued in fulltime employment as a healthcare professional until shortly before the birth of the parties’ child Y in 2003. The wife returned to work on a part-time basis some six months later after taking three weeks paid maternity leave and her accrued annual leave.
In November 2003 the husband commenced working on a fulltime basis on one of his parents’ farms. The wife continued working until shortly before the birth of the parties’ second child Z in 2007. The wife took 12 months leave from her employment following upon Z’s birth.
In 2009 the husband’s parents gifted to the parties a block of land on Property A. The parties built a new home on that property and sold the property at E Street, F Town in September 2011. The parties continued to live in the former matrimonial home on the Property B farm until they separated in August 2014.
At the time of separation the husband remained living in the former matrimonial home with the wife taking up rented accommodation in F Town.
At the date of trial the parties shared the care of their two children on a week‑about basis pursuant to final consent orders to that effect being made in November 2016.
The wife continued working approximately 0.4 FTE as a healthcare professional at the N Hospital and the husband continuing his fulltime occupation as a farmer.
Legal principles
In order to determine the distribution of the parties’ assets between them the Court must firstly be satisfied that it is appropriate that an order for settlement of property be made.[1] I am satisfied that in this case it is appropriate to make an order for settlement of property in circumstances where the parties separated in 2014, and where both parties seek that their property be divided.
[1]Stanford & Stanford [2012] HCA 52
The Court must also make a finding as to:
·the asset pool to be divided between the parties;
·the contributions made by or on behalf of each of the parties to the acquisition, conservation and preservation of those assets;[2] and
·whether any adjustment should be made to the finding as to percentage contribution by each of the parties on account of the factors set out in section 75(2) of the Family Law Act 1975 (Cth) (“the Act”).
[2]Family Law Act 1975 (Cth) s.79(4)(a), (b) and (c)
Finally, the Court must be satisfied that the order it intends to make affords justice and equity as between the parties.
Asset pool
The parties were agreed as to the composition of the pool of assets available for distribution.
The value of the following assets was agreed:
Asset
$ Value
Former matrimonial home and land – Property B
$875,000
Husband’s furniture and effects
$10,000
Wife’s furniture and effects
$4,000
Wife’s motor vehicle 1
$8,000
Husband’s motor bike
$4,500
Husband’s plant and equipment
12,000
Husband’s guns
$5,000
Husband’s half-share in H Business
$9,500
TOTAL
$928,000
The parties superannuation entitlements were agreed as follows:
Superannuation entitlement
$ Value
Wife’s Super Fund 1
$175,699
Husband’s Super Fund 2
$29,986
TOTAL
$205,685
There was also significant agreement as to the parties liabilities as follows:
Liability
$ Value
NAB home loan (joint)
$249,000
Husband’s NAB Visa Card
$9,608
Wife’s ANZ Visa Card
$1,106
TOTAL
$259,714
The parties were however in dispute as to whether an alleged debt of the wife to her mother in the sum of $10,000 and the wife’s “HECS” debt should be determined to be liabilities of the wife to be taken into account.
In paragraph 55 of the wife’s second Trial Affidavit she deposed to selling a motor vehicle 2 post-separation for the sum of $1,000 and purchasing a motor vehicle 1 using funds borrowed from her mother in the sum of $10,000 for that purchase. That is the vehicle that has an agreed value in the asset pool of $8,000.
The alleged debt was included in paragraph 50 in Part K of the wife’s Financial Statement filed 18 January 2018 but not in her second Financial Statement filed 9 August 2019.
In cross-examination the wife said that her parents had provided the funds for the purchase of the motor vehicle 1 but she had given them the $1,000 she had received upon the sale of the motor vehicle 2 she had retained at separation in part-payment of the loan. She said sometime later her mother gave her that money back to buy beds for the children such that she still owed her mother $10,000. It was her evidence the debt had been in existence for approximately five years and that she had agreed with her mother to pay the debt out of any settlement funds she received.
The wife denied she had no obligation to repay her mother and said that the loan liability had been inadvertently omitted from the second Financial Statement. She denied that the car was a gift to her from her mother and repeated that she was required to repay the $10,000, as well as legal fees paid on her behalf by her parents. It was her evidence these debts would be repaid from settlement funds.
When asked if she was saying she has an obligation to repay those sums to her parents she replied “absolutely yes”. I accept the wife’s evidence and find that she has an obligation to repay her mother $10,000 in respect of the vehicle which has been included as an asset of the parties relationship. I find that there must be a corresponding liability added to the agreed list of liabilities.
I find that the HECS debt is in a different category. It was the wife’s evidence that she commenced her teaching training during the course of the marriage but subsequent to separation was unable to study as well as care for the parties’ children on a week-about basis and work shift-work in her occupation of healthcare professional. I make no criticism of her decision.
It was the husband’s evidence contained in paragraph 156 of his second Trial Affidavit that the wife had accumulated various HECS debts during the course of the marriage in relation to three courses of study.
In the wife’s first Financial Statement filed 18 January 2018 she deposed in paragraph 50 in Part K to a HECS liability of $9,300. She did not specify any such loan in her second Financial Statement.
I accept that she has a HECS debt liability. The wife did not adduce any evidence as to the terms upon which that liability is repayable nor any evidence as to a demand for repayment. I am not satisfied on the evidence that the liability is currently due and payable. I do not consider it should be included as a liability of the marriage.
For those reasons I find that the parties liabilities to be as follows:
Liability
$ Value
NAB home loan (joint)
$249,000
Husband’s NAB Visa Card
$9,608
Wife’s ANZ Visa Card
$1,106
Wife’s car loan liability
$10,000
TOTAL
$269,714
Taking those matters into account I find that the net non-superannuation asset pool totals $658,286, the parties’ superannuation entitlements total $205,685 and that the net assets available for distribution between the parties are therefore $863,971.
Contributions
Both of the parties worked throughout the period of cohabitation and marriage save and except for the periods of maternity leave and annual leave taken by the wife following upon the births of Y and Z.
At the commencement of cohabitation the wife had superannuation entitlements of approximately $11,000. If the husband had any such entitlements they were very modest.
Shortly prior to the parties commencing cohabitation in February 2001 they purchased a property at E Street, F Town for $110,000. Funds to purchase the property came from the First Home Owners Grant and a mortgage with ANZ Bank.
It was the wife’s case that in order to obtain the loan, she paid out a credit card debt owed by the husband of $2,000. She alleged that he told her at the time the debt had arisen on the card due to his expenses incurred working on his parents’ farm, as he was not paid wages and did not seek wages because the farm was going to be his one day.
The husband disputed that he worked on his parents’ farm at that time and further, was unable to recall the wife discharging his credit card debt. It was his evidence that he was employed as a mechanic for G Business between April 1998 and November 2003.
I am satisfied that nothing significant turns on either of those matters.
It was common ground that the husband’s father purchased a farming property in J Town intending that the husband and the wife reside at and work the farm on that property. It was the husband’s evidence that he, the wife, his parents and his brother inspected the property in 1999 prior to the parties commencing cohabitation. The wife’s evidence was that the inspection of the property took place in early 2002 shortly after the parties married. In any event, the husband told his father that he did not want to live on or farm that property. The husband’s father purchased the property in any event and farmed it himself.
The husband agreed that at the time of inspection his father had told the wife, in his presence, that when the husband’s parents retired the farm at J Town would be signed over to the husband and the wife, and the land the husband’s parents were farming at Property A would be for his brother Mr C. The J Town property was later sold by the husband’s parents who retained the sale proceeds.
In November 2003 the husband commenced working on the farm at Property A on a fulltime basis. The wife resumed working part-time after taking six months maternity and annual leave following the birth of Y in 2003.
It was common ground that there were discussions involving the husband and the wife, his brother and sister, the husband’s parents and the family accountant with respect to the operation of the family farming properties, including how the husband and his brother would be paid for their work on the farm.
An agreement was reached that the husband and his brother would not receive a fixed regular wage but rather be paid five per cent net of each of the cropping income and livestock sales, as well as sharing a proportion of the profit of the H Business sales and their share farming agreements.
The husband conceded that the wife was concerned that he was not to be paid a fixed regular wage but rather receive a percentage share of annual profits. This was because of the uncertainty such an arrangement created with respect to reliable family income.
It was again common ground that in that six month period following Y’s birth in 2003 when the wife was on six months maternity leave and the husband continued working as an employed tradesman, family finances were stretched.
The decision that the husband return to the family farm to work fulltime was made during that time and effected in November 2003. The parties remained living at the E Street property in F Town. The wife returned to work part-time until the birth of Z in March 2007. She then took 12 months maternity leave before returning to part-time work.
In late 2006 the wife’s parents provided the parties with $130,000, being the net proceeds of sale of a block of land. The parties utilised $85,000 to discharge the mortgage on the E Street property, and used $20,000 to assist with payments of various expenses after the birth of Z in 2007. It was the husband’s evidence that the balance of $25,000 was used to purchase rainwater tanks on Property B. Property B was not gifted to the parties until September 2009. There was no dispute as to the amount the parties received from the wife’s parents. Nothing turns on how the sum of $25,000 was expended.
It was the wife’s case that she agreed to the husband receiving a percentage of the farming operation profits rather than a fixed wage and to ultimately move from the E Street property to live and build a house on the farm. This was in circumstances where it had been represented to her by the husband and the husband’s parents from at least the time the parties’ commenced cohabitation, that the husband would ultimately inherit Property A.
In paragraph 41 of her Affidavit filed 18 January 2018 (in anticipation of the original trial in February 2018) the wife deposed to the husband telling her that his sister would inherit land at F Town, his brother would inherit property at K Town and J Town and, that he and the wife would inherit the Property A land.
In paragraph 42 of the husband’s original Trial Affidavit filed 5 February 2018 he said as follows:
…My parents agreed that Mr C would inherit the K Town property, Ms D would inherit the property at F Town and the wife and I would have the whole of the Property A land but this was not going to occur until after my parents are deceased. My parents are only in their 60s and are still actively working on the properties. I do not expect to inherit the other part of Property A for quite a few years to come.
In paragraph 45 of the same Affidavit the husband deposed to having told the wife that they would one day inherit the Property A land.
In paragraph 59 of the husband’s second Trial Affidavit filed 4 September 2019 he denied that he had ever told the wife Property A would “eventually” be his.
He deposed to recalling that he told the wife that if he was ever going to have a chance of inheriting the Property A farm upon the death of his parents he would have to return home to work on the farm. He also deposed to believing that he had no chance of inheriting any part of his parents farming land unless he was working on the farm.
In paragraphs 74(e) and 75 of that same Affidavit he deposed to no promise or proposal having been made at any time by his parents for either he or his brother Mr C to be gifted farming property owned by their parents during their lifetime.
The husband’s later evidence about his prospective inheritance was contained in paragraphs 109 to 133 of his second Trial Affidavit. He deposed to only being able to recall two times during the marriage talking to his parents about the contents of their Wills.
He said he recalled a discussion in broad terms either at a meeting with the accountant Mr R or at a family meeting at the homestead and also a discussion with his brother, sister and parents about the potential distribution of his parents estates upon their deaths. He deposed to remembering that he and his siblings were asked for their views about that issue and that he indicated he would like the Property A farm inclusive of Property B.
In paragraph 113 the husband deposed to his parents making it clear in the discussions that they were only looking for ideas in relation to their estate planning.
In paragraph 116 he deposed to having been advised by his parents that they had made their Wills, to them not going into specific details about the contents and to his assumption that the contents were in line with the discussions that had occurred with he and his siblings.
It was put to the husband in cross-examination that it was his expectation that he would become a second-generation farmer. On numerous occasions in answer to questions from the wife’s Counsel on the topic, he said it was his “dream”. When it was put to him that he was in no doubt that Property A would ultimately be his, he replied on two occasions that he would hope so.
Those answers were in stark contrast to his evidence contained in paragraph 45 of his first Trial Affidavit filed 5 February 2018 where he agreed with the wife’s evidence that he had told her they would one day inherit the Property A land.
Sometime prior to November 2009 discussions took place between the parties and the husband’s parents about the parties and their children moving to the Property A farm to live.
In paragraphs 118 to 120 of the husband’s second Trial Affidavit he deposed to the parties originally and seriously considering renovating the old homestead on the farming property as opposed to building a new home. He deposed to his parents having already spent considerable monies trying to renovate and rectify various structural problems. In the end the decision was made to build a new house, as repairing and renovating the original homestead was not realistic or financially viable.
In paragraphs 121 to 123 of the same Affidavit the husband deposed as follows:
Had the wife and I decided to live in the original homestead the land would not have been transferred to us.
When the wife and I made the decision to build the new home on Property B the wife and her parents became concerned about the lack of financial security for the wife and I that we were not going to become the registered proprietors of the land.
There were further discussions about this and as a result thereof, my parents agreed to gift the Property B land to us in order for us to build a new home on the land.
It was the wife’s evidence contained in paragraph 41.4 of her second Trial Affidavit that the husband’s parents transferred ownership of the Property B to the parties:
…on the express understanding that we would relocate our family residence to the Property B, immediately adjacent to the Property A farm and from which location the (sic) [Mr Goodwin] would be better able to undertake work and to supervise farming operations on the Property A farm and in the expectation that the farm would eventually be transferred to us.
It was her further evidence contained in paragraph 42 of that Affidavit that it was on that understanding that she agreed to sell the family home in F Town.
The husband was cross-examined at length about that issue. He agreed that on consideration of the work needed to rectify and renovate the old homestead to make it habitable for he, the wife, and their children, it was not financially viable. He agreed that he considered seriously spending a lot of money to renovate the old property in circumstances where he did not require ownership of the land on which the homestead was located.
It was put to him that the reason he had no concern in that regard was that he saw it as part of the inheritance plan. In reply the husband said that he was reluctant to demolish the old house where he had been born and bred as it was significant in his upbringing and was a larger home.
The wife’s Counsel put to the husband that he was in no doubt that Property A would ultimately be his and he replied that he would hope so at some stage. When it was further put to him that he had a clear understanding, when he was looking to spend all of the resources of the parties at the time to build a house on someone else’s property, that the property would ultimately come to him he again said he would hope so.
It was common ground that the entirety of the parties’ financial resources at that time, primarily consisting of the equity in the F Town property, would be applied to building the new house property on the Property B block.
It was put to the husband that the plan had changed from renovating the homestead for a family home to building a new home because the wife and her parents were concerned about the parties spending all of their joint resources on a property in which the parties had no real interest. The husband said in reply that the plan had changed because the house had structural issues and that his parents had already spent up to $70,000 on salt damp and cracking.
It was again put to the husband that whatever else came to mind, one of the reasons they decided against renovation was the concern of the wife and her parents about investing money in a property in respect of which the parties had no ownership. The husband conceded that would have formed part of the discussion.
It was further put to him that those discussions between he and the wife included the wife’s concern about them spending all of the net proceeds of sale of their F Town property on building a new house on property in which they had no security. The husband repeated that it was his understanding that the reason they decided to build rather than renovate was because the homestead was unstable.
When the husband was asked why he would not have been concerned about expending all of the parties’ money on a house in which they had no real interest, he responded that he “guessed” that a lot of his early decisions were made on a sentimental basis.
It was put to him that:
·he and the wife’s assets at that time were the equity in the F Town property together with furniture and motor vehicles;
·that they received just over $200,000 net from the sale of the F Town property;
·that in those circumstances he could not have been happy to invest all of their available resources on property in respect of which they had no legal ownership; and
·that such a course could not have been contemplated purely out of sentiment.
The husband responded that he was prepared to take that course.
Again it was put to him that on the basis of sentiment he was saying he was prepared to give all the parties’ resources to his parents to improve their land and property, in which he and the wife had no interest. He replied that he was so prepared.
He conceded that he had a slight concern for the future financial security of the wife and children but agreed it was not significant enough to cause him to avoid divesting himself and the wife of the overwhelming majority of their assets.
In answer to a question from the Court to the husband as to whether he could explain why he would have contemplated such a course, he said that it was to hold on to something that had been in his life all of his life.
The wife’s Counsel asked if he could explain why there was no mention of the issue of sentiment in the decision-making process in his Affidavit. He replied that he could not.
It was put to the husband that the eventual change of plans from renovation to building was not for sentimental reasons but for financial reasons. He agreed that to be the case, in accordance with his evidence contained in paragraph 120 of his second Trial Affidavit.
When asked whether the wife’s parents had expressed concern about the parties’ financial plans, he replied that at the time the plans had gone from renovation to building it was agreed that a substantial sum of money was required to build the house.
When asked if it was only the concern of the wife and her parents that changed the position, the husband said that the wife’s parents were not prepared to contribute a significant sum to build a house that was not built on land the parties owned. He agreed that he would have been prepared to build the new house on his parents’ land.
The wife’s Counsel put to the husband that it was in his mind throughout discussions regarding the various Property A proposals relating to both possible renovations or building a new house, that the property would ultimately be his. He replied again that he would hope so.
When pressed if his evidence was that he was prepared to expend $400,000 on a new house for “hope” of inheriting the land on which it was built, the husband replied that the parties had talked about renovations but the moment plans switched to building a house, the issue of a transfer of ownership of property on which to do so arose.
He agreed that:
·as at the time of trial his evidence was that he would have been prepared to build a house on his parents’ land without a transfer of a part of that land on which to build the house;
·his proposal before there was any discussion with the wife’s parents about spending $400,000 was to build a house on his parents’ land without acquiring a legal interest;
·initial discussions were to the effect that the funds would be raised by mortgaging the F Town house and by way of a capital advance, either a bank loan or funds from the wife’s parents;
·that the wife’s parents refused to fund any part of the building project without a transfer of land into the parties’ names from the husband’s parents;
·the husband’s parents then agreed to that course of action; and
·the parties chose to take the land in a trust as between he and the wife on the advice of the accountant.
I find that at the time the parties entered into discussions about either renovating the homestead on Property A in which the husband’s parents had lived for many years and moving into that house with the children or, building a new house on Property B, the husband was in no doubt and clearly conveyed to the wife that he expected, in due course, to inherit Property A.
I find that from at least the time the husband went to work on Property A fulltime in or about November 2003 for a share of the profits of the farming business as opposed to working for a wage, it was the husband’s clear belief and understanding that he would inherit Property A from his parents.
I find that is why the husband was prepared to spend all of the parties own funds plus borrowed monies on either renovating the homestead on the property or building a new home on the property without requiring a transfer of land from his parents on which to build a house.
I do not accept the husband’s evidence that the likelihood of inheritance was merely a “hope” he held that he would have an opportunity to be a second‑generation farmer based on his sentimental attachment to the property.
I find that the only reason the question of a transfer of land for the purpose of building the house arose was because of the refusal of the wife’s parents to advance any funds towards the building costs of the Property B house unless it was constructed on land owned by the parties.
It was common ground that the parties were unable to obtain a home loan or a commercial loan because of the land gifted to them by the husband’s parents being classed as “rural and remote” and the parties not having sufficient income to qualify for a commercial loan.
In those circumstances, where the F Town property was not sold until September 2011, the wife’s parents loaned the sum of $197,000 to the parties. The further sum of $250,000 was borrowed by the parties jointly from the National Australia Bank (“NAB”). The Property B land was ascribed a value of $280,000 for the purposes of Stamp Duty arising from the transfer.
In paragraph 126 of the husband’s second Trial Affidavit he deposed to a retrospective valuation of the land at the time of transfer ascribing to it a value of $488,000.
At the commencement of trial Counsel for the husband applied for an order for a joint expert to be appointed to obtain a retrospective valuation of the property. That application was opposed by the wife.
On the second day of trial the parties agreed to appoint a joint valuer with the request for the valuation to be made in writing and that neither party provide any separate verbal instructions to the valuer.
When the matter came back for final submissions on 15 November 2019 the valuation had been obtained and the parties’ agreed position was that the valuation of the Property B land as at 16 November 2009 was $330,000.
The Property B land was transferred to the parties in September 2009. It comprised 175 acres and was transferred to the Mr and Ms Goodwin Family Trust.
The parties commenced construction of the new home on that land in 2010. They were agreed that the cost of the build was approximately $332,000 but that significant other improvements were also required taking the total borrowings to $447,000.
In March 2011 the parties moved to the new house to live. The F Town property sale settled on 8 September 2011 realising net proceeds of $228,000.
It was the wife’s case that when the parties borrowed the sum of $197,000 from her parents it was agreed that interest in the amount of $53,838.15 would be repayable as well as the principal. Item 7 in the wife’s Book of Tender Documents was a document headed “[Smith] - $190,000 family loan.” It was the wife’s evidence that the husband had calculated the sums set out on the unsigned document based on interest at five per cent compounding annually up to and inclusive of 5 June 2015.
It was the husband’s evidence that the net proceeds of sale of the F Town property were approximately $217,000 and that the full net proceeds were paid to the wife’s parents in satisfaction of the principal loan plus interest.
In cross-examination the wife said that her parents were paid $205,000, not the $217,000 asserted by the husband. She further said that in relation to the question of interest, ultimately her parents had only asked for the $205,000 they were paid. When it was put to her that they did not agree to take any further interest the wife said it was something that the husband and her parents had discussed but that she had not taken part in that discussion.
I find that the wife’s parents loaned the parties the sum of $197,000 towards the building costs of the Property B house, that they were repaid the sum of $205,000 and that they did not seek any further interest payments. The parties had the use of the wife’s parents’ funds from July 2010 to approximately September 2011, a period of some 14 months.
The sum of $205,000 which I find was paid to the wife’s parents upon settlement of the F Town property included an amount of $8,000 over and above the capital sum owed. The amount calculated by the husband to be owing by way of interest as at September 2011 was $12,227.69.[3]
[3] Wife’s Book of Documents – Item 7
There is no doubt that the gift to the parties by the husband’s parents of the land valued at $330,000, the advance to the parties from the wife’s parents of $130,000 in 2006 to which I have previously referred, and the use of the sum of $197,000 provided by the wife’s parents for a period of some 14 months, were important contributions made on behalf of each of the parties.
The importance of the financial contribution of the wife’s parents to the building at Property B was not so much the small amount they ultimately forfeited by accepting in full the lesser interest payment of $8,000 but the fact of providing the finance in circumstances where the parties borrowing capacity to build the new house was limited, notwithstanding the gift of land to the parties from the husband’s parents.
I find that the husband’s parents gifted the husband and the wife real estate with a value at the time of the gift of $330,000. I am satisfied that without that gift of land the parties may not have been in a position to move from F Town in circumstances where a decision was made that it was not financially viable to renovate the homestead on Property A which the husband had originally intended.
As well as the wife’s parents lending finance towards the building of the former matrimonial home, it is common ground that in February 2011 they provided the further sum of $20,000 for floor coverings.
It was the husband’s case that in February 2011 the wife’s parents informed him that the amount they had received from the sale of the F Town property was greater than what was needed to cover the loan and interest and that they reimbursed $20,000 to contribute to floor coverings.
Both parties agree that the sum of $20,000 was provided in February 2011. That payment predated the payment to the wife’s parents of F Town property sale proceeds by some eight months. I am satisfied that such payment was a contribution over and above the contribution related to the provision of building funds.
It was the wife’s case that on 12 April 2010 her parents provided to the parties the sum of $40,000 to install shed and rain water tanks on Property B. In paragraph 128 of his second Trial Affidavit the husband sought production of the original cheque book in respect of the cheque the wife alleged related to that gift.
The husband did not dispute the gift. The wife was not cross-examined in that regard. I find that was an additional financial contribution made to the parties by the wife’s parents.
It was the wife’s evidence that her parents contributed to family holidays in New Zealand and Queensland. I am not satisfied that this could be classed as a contribution to the acquisition, conservation or preservation of the parties assets. It was a discretionary payment to the parties for which no doubt the wife was grateful. It was the husband’s case that he did not go on the holiday to Queensland but I am satisfied that nothing turns on that issue.
It was common ground that the parties’ children Y and Z attended L School in F Town until Y was in Year 8 when he transferred to M School, a public school. It was not in dispute that the wife’s parents made significant contribution to the children’s school fees.
Again, I am satisfied that this contribution was of a discretionary nature and although no doubt gratefully accepted, does not affect the outcome of these proceedings as between the parties.
There was no real dispute that the parties both worked hard during the period of cohabitation and marriage and contributed their earnings to the family expenses.
The parties commenced cohabitation in February 2001 and separated in August 2014.
Annexure “[H2]” contained in the husband’s Book of Tender Documents was a schedule of his taxable income in each of the years from 30 June 1997 to 30 June 2018.
Annexure “G” to the wife’s Trial Affidavit filed 18 January 2018 was a schedule of the wife’s taxable income for the years ended 30 June 2001 to 30 June 2017.
It was submitted on behalf of the wife that her financial contributions during the period 2001 to 2014 arising from her employment exceeded that of the husband by some $87,000, and that whilst she was in paid employment she consistently earned more than the husband. That accords with the evidence of the parties and I accept that submission.
It was the wife’s evidence contained in paragraphs 65 to 69 of her first Trial Affidavit and in paragraphs 80 to 83 inclusive of her second Trial Affidavit that she was primarily responsible for all housekeeping and household tasks, maintenance to the exterior of both of the family homes and the primary carer for the parties two children including attending to all parenting and home duties for the family generally. She deposed to the husband taking an interest in the children in relation to sports and activities but not their daily living needs.
It was the husband’s evidence contained in paragraphs 66 and 68 of his first Trial Affidavit and paragraphs 143 to 153 of his second Trial Affidavit that he assisted in the care of the children from the time they were infants including when the wife was working shift work which he was able to do because he was working on the farm and had flexibility with his working hours when required.
He further deposed to the parties having the combined family support of his mother and the wife’s mother and to him assisting in taking the children to and from school and other activities as well as contributing to some household duties although he conceded the wife undertook the majority of the cooking, cleaning, ironing and the purchasing of groceries.
Neither party were cross-examined as to their non-financial contributions and I am satisfied, particularly taking into account the equal shared parenting arrangements entered into following upon the parties separation that each party played an important role in the care of the children with the wife taking a greater home-making role. I find that those non-financial contributions should be assessed as equal.
I am satisfied that although the parties’ direct financial contributions from their own labours may have been skewed slightly in favour of the wife, each party contributed what they were able and worked hard to provide a home for themselves and their family.
I find that no adjustment should be made in favour of the wife with respect to her slightly greater income earned over the period of 13.5 years of cohabitation. I find that the parties’ own financial contributions should be assessed as equal.
With respect to the contributions made on behalf of each of the parties by their respective parents, the wife’s parents gifted the sum of $130,000 to the parties in late 2006, $40,000 in April 2010 and $20,000 in 2011. They also forgave some $4,000 in interest. The combined gifts totalled approximately $194,000.
They were significant gifts not just in monetary terms but because they allowed the parties to become mortgage free at the end of 2006 at a period in their lives when the family finances were tight and enabled them to purchase important rainwater tanks for their new property and have more comfortable living conditions in their new home by way of certain floor coverings.
The preparedness of the wife’s parents to loan the parties $197,000 to enable them to proceed, together with a NAB mortgage to build the former matrimonial home was important in circumstances where the parties were limited in what loan facilities were available to them.
I am satisfied the wife’s parents were recompensed for that advance by way of the payment of approximately two thirds of the interest that accrued at a favourable rate to the parties for the 14 months of borrowing. I have already taken into account the interest they forgave as a direct contribution on behalf of the wife.
The gift to the parties of the land on which to build the former matrimonial home, valued at $330,000, was an important contribution made on behalf of the husband. It enabled the husband in particular to fulfil his dream of becoming a second-generation farmer. I am satisfied that their gift was made in the full knowledge of the husband and his parents that the husband could rely on a common understanding that he would ultimately, upon the death of his parents or at such earlier time they may determine, inherit Property A.
The husband was cross-examined about his taxable income post-separation. It was put to him that with respect to income generated directly from the Property A, 40 per cent was paid by him to his parents. The husband agreed with that proposition, and when asked why that was so said that it was to cover their costs in circumstances where his mother and father pay for fertiliser, sprays, machinery and in addition had gifted the sizable block of land to which I have already referred at length.
When it was put to the husband that the payments were made by the husband to his parents in part on account of the gift of the land in 2009, and that a payment of 40 per cent of the income generated from that land has occurred in every financial year since the property was transferred in 2009 and ongoing, he agreed that was the case.
When it was put to the husband that it was his intention that future income arising from farming activities on Property A will continue to be split “60/40” in favour of his parents, he agreed that would be the case.
There was no evidence before the Court as to any specific amount paid from the parties’ trust income to the husband’s parents in any of the financial years ending 30 June 2010 to 30 June 2014 inclusive that was directly attributable to being payment in consideration of the gift of land.
In paragraph 83 of the husband’s first Trial Affidavit he deposed to receiving only 40 per cent of the income from Property A as opposed to the 60 per cent put to him by Counsel for the wife and agreed by him, and ascribed the reason for that payment being “…as my parents put in all the input costs which are approximately $15,000 each year. This share farming arrangement has been put in place since the wife and I took ownership of the property.”
I am satisfied that at least in the five financial years to which I have referred that, on the husband’s evidence, the parties were in effect repaying some amount to the husband’s parents in consideration of the gift of land. The husband did not adduce any evidence of a request or demand from his parents in that regard.
I am unable to make a finding on the evidence as to a monetary amount that was effectively “repaid” to the husband’s parents but in any event without taking that into account I am satisfied taking into account:
·the length of the relationship and the parties direct financial and non‑financial contributions;
·the significance of the monetary gifts made to the parties by each of the husband and the wife’s parents;
·the fact that all of the gifts to which I have referred were made significantly prior to the parties separating; and
·the various advantages that the gifts represented to the parties,
that the financial contributions made by the parties’ parents on behalf of the parties should be assessed as equal.
Taking all of those matters into account I am satisfied that the contributions to which I have referred in my consideration of sections 79(4)(a), (b) and (c) of the Act should overall be assessed as equal, save and except to the issue of the parties’ contributions towards superannuation.
Superannuation
Other than for short periods of time just prior to and after the birth of each of the parties’ children Y and Z, the wife worked outside of the home as a healthcare professional.
Between February 2001 and November 2003 the husband worked as a mechanic. There was no evidence as to any superannuation entitlements of the husband at the time cohabitation commenced but I am satisfied they were modest.
There was no challenge to the wife’s evidence that at the time the parties commenced cohabitation she had accumulated superannuation entitlements in the sum of approximately $11,000. At the time of trial the wife’s superannuation entitlements totalled $175,699 and the husband’s $29,986.
The wife accumulated her superannuation interest arising from wages earned as a healthcare professional. The wife deposed in paragraph 85 of her second Trial Affidavit to having superannuation interests as at June 2014, some 2 months prior to separation, in the sum of $95,297.86 and at trial superannuation interests in the sum of $175,699, an increase of $80,401.14. The husband adduced no further evidence with respect to the issue of superannuation and neither party were cross-examined in that regard.
The parties’ superannuation entitlements as at the time of trial were agreed. It was the husband’s case that the parties’ non-superannuation asset pool be apportioned as to 60 per cent to him and 40 per cent to the wife with the parties’ superannuation entitlements to be treated differently such that there be a split in his favour from the wife’s fund to effect an equalisation of their respective superannuation entitlements. The wife also proposed that the non‑superannuation asset pool and the superannuation asset pool be treated differently such that she be apportioned non-superannuation assets to the extent of 65 per cent and that each party retain their superannuation entitlements without further adjustment.
I am satisfied that this is a case where it is appropriate to determine the distribution of the parties assets by reference firstly to the non-superannuation asset pool and secondly to the superannuation asset pool.
The wife’s contribution was made in circumstances where she worked shift work. The husband’s evidence that he assisted in the care of the children during times that the wife was engaged in shift-work was not challenged in cross‑examination.
The husband’s proposal with respect to a division of the parties’ superannuation interests involved a splitting order in his favour from the wife’s superannuation entitlements in the sum of $72,857. Under the wife’s proposal she would retain her entitlements in the sum of $175,699 and the husband his in the sum of $29,986.
It was the wife’s evidence contained in paragraph 73 of her first Trial Affidavit that during the marriage the husband had told her that the “farm” was his superannuation and that he did not need to contribute to superannuation.
In paragraph 73 of the husband’s first Trial Affidavit he agreed that he may have told the wife that “…my farm is my superannuation as most farming families are unable to accumulate superannuation and therefore have to rely on their assets in their old age.”
Had the parties not separated, no doubt the expectation of each of them was that upon retirement the wife’s accumulated superannuation would be available for their joint benefit as would the Property A farming property.
In the circumstances of the parties’ separation the wife will have no entitlement to any inheritance of the husband of the Property A land. The husband’s “superannuation” will therefore not be shared by the parties nor can the Court determine what financial benefit the husband may ultimately acquire as a result of the inheritance of that property. On the other hand, the value of the wife’s superannuation entitlements is known to the Court, forms part of the parties’ property and is available for distribution between the parties on whatever basis the Court deems just and equitable.
I find that the parties’ contributions to the superannuation asset pool, particularly taking into account:
·the value of the wife’s superannuation entitlements at the time cohabitation commenced;
·the significant increase in the value of those entitlements in the five years post-separation;
·that from late 2003 to the date of trial the husband made no superannuation contributions; and
·the particular circumstances of this case relating to the husband’s view of his own superannuation,
that the parties total superannuation entitlements at trial in the sum of $205,685 should be apportioned between the parties as to 65 per cent thereof in favour of the wife and 35 per cent thereof in favour of the husband.
That would result in a superannuation split of the wife’s superannuation entitlements in favour of the husband in the sum of $42,003 taking into account that his entitlements with Super Fund 2 at the time of trial were in the sum of $29,986. The wife would retain entitlements in the sum of $133,696 and the husband $71,989.
Section 75(2) factors
The parties are each 44 years of age. Both parties are in good health.
The wife is employed as a healthcare professional and deposed in paragraph 49 of her second Trial Affidavit to working 0.4 FTE at the N Hospital. Her taxable income for the year ending 30 June 2019 was $65,435.
In her Financial Statement filed 9 August 2019 she deposed to owning a half‑share of Property A which at trial had an agreed value of $875,000, as well as a motor vehicle with an agreed value of $8,000 and household contents valued at $4,000. She otherwise had some minimal savings. In addition, the wife had superannuation entitlements with an agreed value at trial of $175,699.
The husband’s taxable income for the financial year ended 30 June 2018 from his occupation as a farmer was $88,105. There was no evidence as to his 2019 taxable income.
In the husband’s Financial Statement filed 5 September 2019 the husband deposed to a 50 per cent share in Property A to which I have referred as well as household contents with an agreed value of $10,000. The husband also owned a motor bike with an agreed value of $4,500 and a collection of guns with an agreed value of $5,000. He owned plant and equipment with an agreed value of $12,000 and a half-share in the H Business with an agreed value of $9,500.
The husband’s superannuation entitlements at trial had an agreed value of $29,986.
The only significant liability of the parties was a NAB home loan in the sum of $249,000. The husband also owed $9,608 on his NAB Visa card. The only debts of the wife for the purposes of these proceedings were an ANZ credit card debt in the sum of $1,106 and a debt to her mother in the sum of $10,000. Both parties of course had incurred significant legal fees with the wife’s being met by her parents and the husband’s by his parents and partner.
I am satisfied that the wife will be required to repay her parents funds advanced for her legal fees upon settlement in accordance with her evidence in cross‑examination. I find that that is an issue as between the wife and her parents and not relevant to the assessment of the division of the asset pool.
The wife deposed to weekly income at the time of trial of $1,582 per week comprised of wages in the sum of $1,258 together with a reportable fringe benefit in the sum of $324.
In the husband’s Financial Statement filed 5 September 2019 he deposed to total average weekly income of $1,085.
I find that both parties have the physical and mental capacity for appropriate gainful employment and that they are both gainfully employed.
The parties share equally in the care and control of Y and Z who live with each of them on a week-about basis. It was common ground that there were no child support debts arising in respect of either party and that each party was responsible for the costs of the children whilst in their care.
Neither party completed “Part N” in their respective Financial Statements but each party deposed to an income slightly greater than expenses in their Financial Statements.
I find that both parties are able to support themselves and the children whilst in their care. Neither party has a responsibility to support any other person.
The husband deposed to:
·living in a de facto relationship with Ms P and to Ms P contributing to household expenses;
·the likelihood of earning significantly less income in the 2019 financial year as a result of drought; and
·having received financial assistance from his de facto partner Ms P.
The husband is a farmer. Seasons are variable and in those circumstances it is expected that there will be “good years” and “bad years” but I am mindful that notwithstanding drought, the husband has been gainfully employed on a fulltime basis as a farmer since November 2003.
The wife was living in a de facto relationship with a Mr Q. In cross-examination at trial she deposed to she and Mr Q ceasing to live together some eight weeks prior to the trial commencing but remaining in a relationship.
It was common ground at trial that the wife’s parents contributed to private school fees for Y and Z at L School from the time they commenced school. It was the wife’s evidence in cross-examination that post‑separation the husband paid half of the children’s school fees and her parents the remaining half until Y moved to M School where upon the wife took responsibility for his school fees.
It was her further evidence that Z would commence attending F Town High School in 2020, that she would be paying Z’s high school fees and that the fees would decrease. She said that when Mr Q had shared her accommodation he had generally paid the sum of $250 per week by way of rent to her parents and they had shared food and other household costs. It was her evidence that she hoped their relationship would improve.
Neither party were, at the time of trial, eligible for a pension allowance or Commonwealth financial benefit. Although the wife currently has significantly greater superannuation entitlements than the husband, both parties are many years away from being able to access their superannuation entitlements.
When the parties separated in 2014 the husband remained living in the former matrimonial home on the farm and the wife moved to a rental property in F Town.
At the time of trial the former matrimonial home had an agreed value of $875,000. The mortgage liability was $249,000.
It was common ground that in the five years between separation and the trial the husband had made interest only payments with respect to the NAB home loan such that the principal owing had not reduced. At the time of trial those payments were $344 per week.
During that period of time the wife lived in rental accommodation. I find that the wife paid rent, including to her parents at the rate of $250 per week in relation to the property at O Street, F Town which they purchased in or about 2016. The wife’s first Financial Statement filed 19 August 2016 referred to a rental expense at that time, which preceded her parents purchasing the rental property, of $230 per week.
During the period of cohabitation and marriage the parties at all times lived in accommodation that they owned subject to bank mortgages.
Subsequent to separation the husband maintained control and the sole use of the majority of the parties’ assets, including remaining living in the former matrimonial home.
There is no doubt that the former matrimonial home afforded the parties a comfortable style of living having only been built some four to five years prior to separation.
I have already referred to the very significant contributions made by and on behalf of each of them over the period of cohabitation and marriage to the acquisition, conservation and improvement of their property.
I consider that the wife’s ability to maintain a standard of living that in all the circumstances is reasonable is a factor to be considered in this matter.
Following separation the parties shared and continue to share the care of the children equally.
At the time of separation Y was aged 11 and Z seven and a half.
The wife’s evidence was that in circumstances where she and the husband agreed to the care of the children being shared equally, she was only able to maintain her employment at approximately half time.
I have little doubt that the husband’s capacity to work fulltime even though self‑employed was also impacted from time to time as a result of him sharing the care of the parties children equally.
I find that both parties wish to continue their role as parents. I find they are both able to continue working and do not require financial orders to protect that wish.
Section 75(2)(o) of the Act requires the Court to take into account “…any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account…”.
It was submitted on behalf of the wife that the fact that the husband has a realistic expectation of inheriting Property A upon the death of the husband’s parents, or such earlier time as they may determine, is an important factor to take into account.
He submitted that the parents farming enterprise is a highly lucrative and valuable enterprise to which the wife has made substantial contributions including agreeing to the husband receiving a percentage of the enterprises net income and agreeing to move to live on the farm.
It was the husband’s evidence that any entitlement he may eventually have to the property could not be considered imminent in circumstances where at the time of trial his parents were still aged in their sixties and actively farming the property.
The husband’s Counsel submitted that although the husband may well ultimately inherit the farming property the evidence before the Court was that the parties had received significant financial assistance from the wife’s parents during the course of the cohabitation and marriage and that one would expect in the usual course she may also inherit property upon the death of her parents.
I find taking into account the age of the parties, the age of the husband’s parents, the lack of evidence as to any value to be ascribed to the Property A farm and the vagaries of nature that frequently attend upon farming operations, that it is not possible to either calculate or posit the value of the husband’s eventual inheritance.
Submissions were made by Counsel for the wife as to a possible calculation of the value of the inheritance based on the net income produced from the farming enterprise of which at the time of trial the husband was receiving 10 per cent but I am not satisfied on the evidence that such a submission has merit.
I am not satisfied that this issue supports any adjustment to the entitlement of either party.
I find that it is appropriate under this section to also consider matters arising from the fact that the husband maintained control of almost the entirety of the parties’ assets post‑separation and for the five years leading up to trial. He was therefore able to continue farming Property A owned by the parties’ trust and retain the income therefrom without any distribution to the wife.
I have already taken into account the payments made by the husband to his parents from the income earned by the trust arising from his farming activities on the Property A post-separation. This payment in some proportion reflected an acknowledgment to his parents of the gift of land in 2009.
I do not consider any further adjustment should be made to the parties respective entitlements on account of those payments.
The NAB debt relating to the construction of the former matrimonial home was originally $250,000. During the period prior to separation and post‑separation firstly the parties and then the husband paid interest only payments in respect of that loan such that by the time of trial the principal had not reduced below $249,000.
Between separation in August 2014 and September 2019 I have already found and accepted the wife’s evidence that she paid rent firstly to landlords in the likely sum of $230 per week but from approximately late 2016 to her parents at the rate of $250 per week.
Taking into account the evidence of each of the parties contained in their original Financial Statements filed on 19 August 2016 (wife), 16 September 2016 (husband), 9 August 2019 (wife) and 5 September 2019 (husband), I find that the amount paid by the husband with respect to the interest only payments on the NAB home loan was generally $100 to $150 per week more than the wife paid in rent, firstly to non-family landlords and thereafter to her parents. In addition, the husband paid the rates and taxes accruing from time to time over the former matrimonial home.
I am not satisfied that that issue supports any adjustment to the entitlement of either party.
As I have said previously though, it was the husband who benefitted to the exclusion of the wife from the income earned by farming the parties’ jointly owned property (through their trust) at Property A.
I do not consider that the Court should attempt to make any finding by way of mathematical calculation of the benefit gained by the husband in that five year period arising from the matters to which I have just referred. Rather, any adjustment in favour of the wife should be considered against the background of my finding of the parties equal contributions to the acquisition, conservation and improvement of the non-superannuation assets and be an adjustment that would appropriately reflect the benefits to the husband post‑separation in which the wife was unable to share.
I find that an adjustment of 1 per cent should be made in favour of the wife with respect to the percentage distribution of the parties’ non-superannuation assets on account of those factors. This is an adjustment of $13,166 (rounded) in real terms.
Conclusion
Taking into account the findings I have made with respect to the parties’ contributions to the non-superannuation asset pool and the findings with respect to the section 75(2) factors to which I have referred, I find that overall the parties’ non-superannuation asset pool should be divided as to 51 per cent to the wife and 49 per cent to the husband.
I find that the superannuation pool should be divided between the parties as to 65 percent thereof to the wife and 35 per cent thereof to the husband.
The gross non-superannuation asset pool has a value of $928,000. Of that amount the wife has in her possession assets to a value of $12,000. The husband has assets in his possession to a value of $916,000. The wife’s liabilities total $11,106.
The net non-superannuation asset pool totals $658,286. A division of that pool as to 51 per cent to the wife and 49 per cent to the husband would result in the wife retaining assets to a value of $335,726 (rounded) and the husband to a value of $322,560 (rounded).
The husband has in his possession:
·the former matrimonial home valued at $875,000;
·furniture and effects valued at $10,000;
·a motorbike valued at $4,500;
·plant and equipment valued at $12,000;
·guns valued at $5,000; and
·a half-share in the H Business valued at $9,500.
That is the total of $916,000 to which I have referred.
The husband’s liabilities are:
·$249,000 in respect of the NAB home loan; and
·$9,608 in respect of an NAB Visa Card,
being a total of $258,608.
Accordingly the husband currently has net non-superannuation assets in his possession to a value of $657,392. The wife has net assets in her possession to the value of $894.
To effect the division of the parties’ net non-superannuation assets as determined, a payment will be required by the husband to the wife in the sum of $334,832, in consideration of which he will retain the assets referred to in paragraph 231 hereof.
My findings with respect to the division of the parties’ superannuation asset pool would require a split of the wife’s superannuation entitlement in favour of the husband in the sum of $42,003.
It was the wife’s position that she should retain all of her superannuation entitlements free of any claim by the husband in circumstances where the husband had asserted to her from early in the parties’ relationship that “the farm” was his superannuation. The husband conceded that position in his evidence to which I have already referred.
At trial the wife sought that the non-superannuation asset pool be apportioned as to 65 per cent to her and 35 per cent to the husband in addition to the orders she sought regarding the superannuation pool. That would have resulted in the wife retaining total assets including non-superannuation and superannuation in the sum of $603,585 and the husband in the sum of $260,386.
I find that such an order would not afford justice and equity between the parties notwithstanding the particular circumstances of this case and the submission of the wife’s Counsel that an overall division of the total asset pool such that the wife retained approximately 70 per cent thereof was a reasonable and acceptable outcome. Nor, for the reasons I have given did I consider the husband’s position as to a 60 per cent distribution to him of the parties’ non‑superannuation assets and an equalisation of the parties’ superannuation entitlements would afford justice and equity as between the parties.
I am however mindful that both parties are relatively young and are a long time from being able to access their superannuation either by way of the wife’s entitlements or the husband’s farm inheritance. I find that justice and equity will be better served in this matter by reducing the husband’s payment to the wife in the amount of the superannuation split that I have determined, such that the wife retains all of her superannuation entitlements and the husband, who is reliant on variable income from his occupation as a farmer, will be required to pay a lesser amount to the wife. I intend to make orders to effect that outcome, which will reduce the payment by the husband to the wife from $334,832 to $292,829.
Costs order
In paragraph 18 of these reasons I refer to the consent order made by Judge Brown in chambers on 6 September 2018 fixing the husband’s costs arising from the wife’s Application to adjourn the February 2018 trial in the sum of $8,484. That amount was to be paid to him contemporaneously with the final determination of the proceedings between the parties. The parties also agreed that interest accrue on the agreed cost amount at a rate of 3.5 per cent per annum from the date of the order to the date payment of the agreed cost amount is made in full.
Accordingly, payment by the husband to the wife of the sum of $292,829 arising from the division of the asset pools in the terms I have determined will be reduced by the principal sum of $8,484 and by interest on that amount to be calculated at the rate of 3.5 per cent per annum until the date of payment.
I intend to order that payment of the sum owing by the husband to the wife as determined herein should be made on or before 31 January 2021. Interest therefore at the rate of 3.5 per cent per annum will accrue on the cost amount up until the date of payment which may of course occur prior to 31 January 2021. I will frame my orders accordingly.
In circumstances where neither party framed the orders they sought in specific terms other than as a percentage division of the asset pool it will be necessary for the parties’ Counsel to draft the order for settlement of property in accordance with these reasons.
For all these reasons I make the orders as set out at the commencement of these reasons for judgment.
I certify that the preceding two hundred and forty-five (245) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Mead delivered on 27 November 2020.
Associate:
Date: 27 November 2020
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Fiduciary Duty
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