HANLON & REID

FAMILY COURT OF AUSTRALIA

HANLON & REID

[2020] FamCA 924

FAMILY LAW – PROPERTY SETTLEMENT – Application for a final property settlement order – Where the husband and wife have been in a relationship that exceeds 50 years – Where the husband and wife have each made significant financial and non-financial contribution to the assets over that 50 year period – Where the forgiving of a debt by a third party and monies received from a testamentary trust were significant contributions made on behalf of the wife – Discussion as to whether there should be a further adjustment for s 79(4)(d)-(g) of the Family Law Act 1975 (Cth) matters – Where the applicant wife submits that her life expectancy is greater than the husbands – Where there is no expert evidence about life expectancy – Where the wife has an entitlement to a life pension – Determination of what was a just and equitable property settlement.

Family Law Act 1975 (Cth) ss 75, 79, 87
Matrimonial Causes Act 1959 (Cth)

Chorn and Hopkins (2004) FLC 93-204
Fontana & Fontana (2016) FLC 93-688
Gosper and Gosper (1987) FLC 91-818
Jones v Dunkel (1959) 101 CLR 298
Kessey and Kessey (1994) FLC 92-495
Kowaliw and Kowaliw (1981) FLC 91-092
Lawrie & Lawrie (1981) FLC 91-102
S & P (unreported Family Court of Australia Fogarty, Lindemayer and Finn JJ 29 April 1997)
Townsend and Townsend (1995) FLC 92-569

APPLICANT:

Ms Hanlon

RESPONDENT:

Ms B Reid as Case Guardian for Mr Reid

FILE NUMBER:

SYC

398

2020

DATE DELIVERED:

30 October 2020

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

12 - 13 October 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Gould

SOLICITOR FOR THE APPLICANT:

Beswick Lynch Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Wong

SOLICITOR FOR THE RESPONDENT:

York Law

Orders

Amended as per slip rule 30.10.20

Pursuant to s 79 Family Law Act 1975 (Cth), a property settlement order is made in the terms of paragraphs 2 to 18.
Within 28 days of the making of these orders that the applicant wife do all such things and sign all such documents as may be necessary to transfer to the respondent husband the whole of her right, title and interest in the property known as and located at 2 E Street, C Town (Lot … in DP …).
Within 28 days of the making of these orders that the respondent husband do all such things and sign all such documents as may be necessary to transfer to the applicant wife the whole of his right, title and interest in the property known as and situate at H Street, Suburb D being Lot … in Deposited Plan ….
Immediately upon the parties compliance with the preceding paragraph herein the parties shall procure the closure of the joint account.
Each party shall pay one half of the unpaid rates in respect of the Suburb D and C Town properties which at the date of the hearing had a combined agreed amount of $4,765.

Sale of 4 E Street

Within 28 days of the date of these orders, the husband ensures that Mr K vacates 4 E Street in DP ….
Within 28 days of the making of these orders that the parties do all such things and sign all such documents as may be necessary to list the property known as and located at 4 E Street, C Town ("4 E Street") for sale on the following terms and conditions:
(a)list 4 E Street for sale by private treaty with such agent as the parties may agree to appoint and in default of agreement with Mr L at N Real Estate ("the selling agent"), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
(b)the sale price at which 4 E Street shall be listed shall be mutually agreed upon by the parties or, in the absence of agreement reached within fourteen (14) days of the date of these Orders shall be $1,250,000.00;
(c)the parties shall each co-operate in every way with the agent including (without limiting the generality of the foregoing):
(i)making the key available to the agent;
(ii)ensuring 4 E Street, including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
(iii)signing all documents requested by the agents in relating to the listing for sale of the 4 E Street except a contract or agreement for sale which has not been authorised by the parties solicitors
(d)the parties shall each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale;
(e)the parties shall instruct such solicitor as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within fourteen (14) days of these orders shall instruct such solicitor as may be recommended by the selling agent.
In the event 4 E Street is not sold by private treaty within 6 months of the making of these Orders:
(a)the parties shall list 4 E Street for sale by public auction with the selling agent;
(b)the reserve price for the purpose of such auction shall be such as the parties agree upon or in the absence of agreement $1,250,000;
(c)in the event the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of 4 E Street at a price which is not more than 10% below the reserve price;
(d)if 4 E Street remains unsold, the parties shall do all acts and things and sign all documents necessary to immediately relist 4 E Street for sale by public auction again, on a date nominated by the said agent and at such auction there shall be no reserve price unless otherwise agreed by the parties.
On settlement of the sale of 4 E Street the proceeds of sale be paid in the following manner and priority:
(a)all costs and expenses of sale including legal costs and disbursements, agents commission, valuers fees, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties).
(b)the amounts required to pay all municipal and water rates outstanding with respect to 4 E Street;
(c)the balance then remaining shall be divided between the parties as to 70 per cent to the wife and 30 per cent to the husband.
In the event that the property sells for more than that sum of $1,250,000, the wife will receive 56 per cent of that increase and the husband 44 per cent. Conversely, if it sells for less than that sum, the wife will bear 56 per cent of that decrease and the husband 44 per cent.

M P/L atf the Reid Family Settlement

Within 28 days from the date of the making of these Orders the husband and wife shall do all and acts and things, vote in favour of all resolutions, record all necessary minutes and sign all documents as may be required to:
(a)transfer to the wife, at the wife's cost, the husband's shares in M Pty Ltd;
(b)for the husband to resign as director of M Pty Ltd.
Simultaneously with the wife's compliance with paragraph 2, the wife shall indemnify and keep indemnified the husband and hold the husband harmless for any and all unpaid taxation liabilities (if any) , or any debts, dues, costs, interest and demands whatsoever both at law and in equity which the wife and the company now has or may have at any time or times hereafter against the husband or which may arise in respect of any act or thing done or omitted to be done by the husband up to and including the date of making of these Orders whether by reason of the husband having been an employee and/or director and/or officer of the company and/or by reason of the husband's shareholding within the company and/or any loan account in the husband's name and/or the receipt by the husband of any moneys at any time from the company or otherwise.
Simultaneously with the wife’s compliance with paragraph 2, the husband shall relinquish all of his rights as to all capital and income of the Reid Family Settlement and the wife shall indemnify the husband in relation to any debt in respect of that trust.
Within 14 days of the date of these orders, the parties do all things and sign all necessary documents to ensure the balance of the funds in National Australia Bank account …50 and account …93 are divided evenly between the parties.
The wife will do all things necessary to wind up the Reid Family Settlement Trust.
The Reid Family Settlement Trust be discharged from any obligations it may owe to the husband.
The husband shall retain sole legal and beneficial ownership of the following items to the exclusion of the wife:
(a)His NAB account #…60;
(b)The Baby Grand Piano;
(c)The Motor Vehicle 1;
(d)The Motor Vehicle 2;
(e)The Motor Vehicle 3;
(f)Monies owed to Mr K.
Otherwise each party shall retain sole legal and beneficial ownership of the items to the exclusion of the other of all assets including bank accounts, motor vehicle and superannuation in her control and possession and each party is to be responsible for and indemnify the other in respect to any liability in their name or associated with any asset that that party receives or retains.

Section 106A

In default of either party doing all acts and things and executing all such documents as are necessary to give effect to these Orders within 14 days of an obligation to do so is set under these Orders, and on the Registrar being satisfied of such failure or neglect or default (by the defaulting party) by way of an affidavit evidence only, then a Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to s 106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party’s costs and disbursements on an indemnity basis.

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 Hanlon & Reid 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 SYDNEY

FILE NUMBER: SYC 398 of 2020

Ms Hanlon

Applicant

And

Ms B Reid as Case Guardian for Mr Reid

Respondent

REASONS FOR JUDGMENT

Introduction

The husband, who is 87, and the wife, who is 78, have, after a relationship in excess of 50 years and two marriages, been unable to decide how their property should be divided. With a little melancholy, I now do so.
Upon the application of the daughter of the parties, she was appointed as the husband’s case guardian on 17 September 2020 (Reid & Hanlon [2020] FamCA 868).

Applications

The wife sought a distribution of the overall net assets of the parties as to 64 per cent to herself and 36 per cent to the husband. The formal orders that she sought are set out in Schedule 1.
The husband sought an equal division of the net assets of the parties. The form of the orders that he sought are set out in Schedule 2.

Short history

The husband was born in 1932 and is 87 years of age. The wife was born in 1941 and is 78 years of age.
The parties were first married in 1961.
There are two children of the marriage, Ms B Reid born in 1962 (58 years of age) and Mr O Reid born in 1964 (56 years of age).
On 26 July 1975, the Decree Nisi of the dissolution of the parties’ first marriage under the Matrimonial Causes Act1959 (Cth) became absolute on 26 July 1975. There was no property settlement at that time.
In 1983 the parties sought and obtained the approval of the court of an agreement pursuant to s 87 Family Law Act 1975 (Cth) (“the Act”) but did nothing to implement the terms of that agreement.
The wife relocated to the P Region in 1987. Whilst there, the wife commenced living with Mr Hanlon and married him in 1988. Mr Hanlon died in 1989.
The relationship between the parties recommenced in or about 1991.
The husband retired in 1997.
The parties remarried in 2015. The parties separated on a final basis in October 2019.
The wife commenced proceedings on 22 January 2020.
On 17 September 2020 Ms B Reid, the elder child of the marriage, was appointed the husband’s case guardian.

Length of cohabitation

The parties agree that their relationship spanned a period of 58 years (from 1961 to 2019). The wife’s affidavit initially indicates that the parties were apart for at least a few months in 1975 (paragraph 13) and again for at least a few months in 1983 (paragraph 13), although the wife is vague as to actually how long it was before they recommenced a de-facto relationship. The inference that would be drawn from the wife’s evidence is that the cessation of the relationship in 1983 was not of any significant duration. However, the case guardian gives evidence in her affidavit that the parties were separated between 1983 until 1987 and the wife resided at R Street, Suburb S. Neither the wife nor the case guardian were tested on this evidence.
The next difference in the evidence of the wife and the case guardian relates to the period when the wife returned from the P Region after the wife’s short second marriage to Mr Hanlon.
The case guardian refers to Mr Hanlon’s death in 1989 and says at paragraph 21 of her affidavit filed 21 September 2020:
… I became very aware of my mother’s deep distress and her wish to come back and live in Sydney as a consequence of phone calls that I had with her. My ex-husband Mr T agreed to travel up to the P Region and drive her back to Sydney. To the best of my memory immediately returned to live in the U Street property with my father.
The wife says that she returned to Sydney in 1991 and lived at a property she had acquired at Suburb W. At paragraph 19 of the wife’s trial affidavit she says that after she returned from the P Region:
I would return to the former family home at U Street to visit Mr O Reid and eventually I moved back to live there with Mr Reid and Mr O Reid. Mr Reid and I recommenced a relationship. This was on and off for a number of years. We did not always live together and as in earlier years we had periods of separation including separate places of residence.
Neither the wife nor the case guardian were tested about the discrepancies in this evidence and I am unable to resolve them.
The wife also gave evidence that in 2007, after she purchased the property at X Street, Suburb Z she lived there alone for approximately one year.
At paragraph 49 of her affidavit filed 21 September 2020, the wife says she lived in an over 55s village for a short period of time alone.
Paragraphs 51 and 52 of the wife’s affidavit record that she lived at Y Street, Suburb V from when it was purchased in 2013 and stayed there until Suburb D was purchased whilst the husband lived at C Town. On the other hand the case guardian’s evidence was that the husband and wife lived together during this period at Suburb V and then Suburb D until final separation. I accept that it is probable at least the husband visited the C Town property from time to time. Again because these conflicting statements were not tested I am unable to resolve this conflict in the evidence.
I think it is safe to conclude that the parties were together as a married or de facto couple for periods which cumulatively exceed 50 years.
During the short periods of the parties’ separation, they continued to hold joint property.

Credit

Counsel for the wife asserted that the wife gave evidence in a fulsome way, made concessions and she was not challenged on any significant matter. However, the wife’s memory of specific details in relation to transactions was not strong and it has been demonstrated that a number of her assertions are not supported by other objective evidence. I need to treat cautiously assertions that the wife makes where there is no objective evidence.
In contrast, counsel for the wife submitted that the court would find that the evidence of the case guardian was infected by self-interest in relation to her own position. Counsel for the wife referred to the concession by the case guardian that she was there mainly to support her father. There is nothing unsurprising about that statement by a case guardian. The case guardian however also made it clear when answering those questions, that her overall aim was to attempt to see a just and equitable outcome achieved between her parents. I do not accept the submission by counsel for the wife that the case guardian tailored her affidavit to advance her own interests or position.
The case guardian, of course, was in the difficult position of giving evidence which may have been on occasions sourced by statements made to her by her father. There is one piece of evidence which the case guardian conceded she got wrong. At paragraph 75 of her affidavit she says that Mr K told her that he and the husband went to the Suburb D property on 7 January 2020 and took the top off the baby grand piano (valued at $150,000) because one of the husband’s friends had seen an ad placed by the wife that indicated that the wife was attempting to sell the grand piano for $120,000 or nearest offer. In her oral evidence, the case guardian said it was not Mr K who said that to her and that was an error in her affidavit. That error was of no moment because it was uncontroversial that the top had been taken off the grand piano and taken away from the Suburb D property to prevent the sale of the piano.

Chronology

The husband was born in 1932 and is 87 years of age. The husband’s name at birth was Q but in 1997 the parties’ surname was changed to Reid.
The wife was born in 1941 and is 78 years of age.
The husband purchased J Street, Suburb CC for 250 pounds.
Once the wife completed High School she was awarded a scholarship to study medicine at university but discontinued when she married the husband. The husband was a self-employed tradesperson until he retired.
The parties married for the first time in 1961. In May 1961 the husband purchased a second property adjoining J Street, Suburb CC for 1,350 pounds. Part of the Suburb CC property was sold in July 1961 for 1,215 pounds. In 1964 the wife’s father initially built a garage on the Suburb CC property and subsequently assisted in building a dwelling on the Suburb CC property using materials paid for by the parties. The parties resided at this property until 1972.
The parties’ first child Ms B Reid was born in 1962. The parties’ second child Mr O Reid was born in 1964.
In 1964 a partnership known as DD Company was established to conduct the husband’s business. This partnership was dissolved in 1983.
In 1967 the husband and the wife purchased a lease over 520 acres of land at E Street, C Town. This purchase was funded through private loans. The husband used the property for his business which generated a greater income for the family.
The husband and the wife purchased vacant land at U Street, Suburb V in 1970 for $10,000, this purchase was funded from the parties’ savings. The parties borrowed money from a bank to fund the build on this land.
In 1972 the parties moved to U Street, Suburb V and sold the Suburb CC property around the same time.
The wife started a Bachelor of Arts degree, later transferring to a Law degree in 1973.
The parties separated in 1975 and were divorced for the first time in 1975. The parties continued to live under the same roof and it is unclear when the romantic relationship between the parties recommenced.
Between 1978 and 1980 the wife prepared documentation to convert the C Town property from leasehold to freehold land. This then allowed the parties to subdivide the land into five lots.

Between April and July 1981 Lots 1-3 of the newly created lots at C Town were sold. The funds from these sales were used to purchase FF Street, Suburb EE.
The wife commenced working as public servant in 1981. In 1982 the wife suffered a workplace injury and eventually in 1987 received $429,957.22. The wife said this was $500,000 but I accept the figure found in the Supreme Court of New South Wales Court of Appeal judgment.
On 23 October 1982, the GG Family Trust was established. HH Pty Ltd was appointed trustee and the parties were the co-directors.
In 1983 the parties separated for a second time and a section 87 Agreement was approved. There was also a consent order that the husband pay the wife maintenance. The parties recommenced their relationship in 1983 and neither the s 87 Agreement nor the maintenance order were implemented by the parties.
In 1983 the wife purchased R Street, Suburb S. The wife says that the funds for this purchase came from the money received from her employer however this litigation was not finalised until 1988. The wife moved into this property shortly after it settled. As already noted, there is a difference in the evidence between the wife and the case guardian as to how long it was that the wife stayed at the Suburb S property. The wife says it was a few months. The case guardian however said that she lived at Suburb S with her mother between 1983 and 1987. The case guardian does say however that her mother moved back and recommenced living with her father at some point prior to her relocating to the P Region.
The Reid Family Settlement Trust was established in 1983. The Corporate trustee was JJ Pty Ltd which was replaced by M Pty Ltd in 2007.
In June 1985, the parties sold the Suburb EE property.
The wife sold the Suburb S property in 1987.
In 1987 the wife re-located to the P Region.
In 1988 whilst the wife was living on the P Region she commenced to live with Mr Hanlon. The wife and Mr Hanlon married in 1988. Mr Hanlon died in 1989.
In November 1989 the wife purchased KK Street, Suburb W. The wife remained living in the P Region until 1991 when she returned to Sydney living at the Suburb W apartment.
In or around 1991 the wife and the husband recommenced their relationship and the wife moved in with the husband at the Suburb V property which had been renovated by the husband and Mr O Reid.
During the early 1990s the husband bred, grazed and sold livestock from the C Town property.
In 1991 the wife recommenced working as a professional in NSW. In 1993 she established her own business in Suburb LL.
The wife purchased an office premises at BB Street, Suburb LL to conduct her business at in July 1994. The property was purchased by the entity AG Pty Ltd which was owned by the wife and a solicitor who worked with her. This property was funded by a bank loan secured over the wife’s Suburb W apartment.
The wife established a self-managed superannuation fund called Super Fund 1 in 1996.
The husband retired from his business in 1997.
In April 1997 the Suburb LL office was sold to HH Pty Ltd (the trustee of the GG Family Trust).
On 6 May 1997 the wife sold the Suburb W apartment.
In March 1998 HH Pty Ltd leased the Suburb LL office for market rent.
In October 1998 HH Pty Ltd purchased a one third share in MM Street, Suburb NN.
In July 1999 National Australia Bank secured a mortgage over the U Street, Suburb V property for $710,000 this money was applied to the Suburb NN development.
The Suburb LL office was sold by HH Pty Ltd in late 2001.
In 2002 the HH Pty Ltd engaged in litigation regarding the development at Suburb NN. Later in 2002 the Supreme Court of NSW ordered a trustee be appointed for the sale of the Suburb NN property. In 2003 the Suburb NN property was sold for $2,760,000.
In 2004 two amounts which totalled $550,000 were received from Mr PP and paid into the account of the family trust.
The wife purchased X Street, Suburb Z in December 2007 from Mr O Reid and his wife. The wife lived alone in this property for just under one year when it was sold in October 2008.
The wife’s friend, Mr PP, died in 2007. The wife was a co-executrix and received money from a testamentary trust established by his Will. The amount that was received is a matter of controversy.
The property at U Street, Suburb V was sold in 2008. Following this sale the parties moved to a property they purchased in Suburb QQ. They lived at Suburb QQ until 2010.
In 2010 the parties purchased a townhouse at RR Street, Suburb S but it was sold just over one year later.
In July 2013 a property at Y Street, Suburb V was purchased whilst the parties were together using funds from the Reid Family Settlement Trust. The wife says this property was purchased in her name only but the transfer indicates that the property was purchased in the joint names of the parties.
In 2015 the husband and wife married for the second time. The parties separated on a final basis in October 2019.
In late 2016 Y Street, Suburb V was sold and H Street, Suburb D was purchased in joint names. In 2017 the case guardian separated from her husband and moved in to the Suburb D property with the husband and wife.
Since April 2016 the wife has provided financial assistance to Ms SS in the sum of $300,069.
In late 2016 the wife loaned Ms TT $136,500 to help her establish her business.
In March 2019 the case guardian and the wife became estranged.
The wife retired on 30 June 2019 and receives a fortnightly superannuation payment.
In December 2019 the wife advertised the husband’s piano for sale for $120,000. The wife also locked the husband out of joint accounts.
On 7 January 2020 the husband entered the Suburb D property and removed the top of the piano so that it could not be sold.
The wife commenced proceedings in this Court on 22 January 2020.
On 16 March 2020 the wife made a number of withdrawals of funds from the family trust bank account (NAB a/c #…50) in the sum of $40,852.59.
As indicated above, on 29 April 2020 the wife made a number of withdrawals of funds from the same account in the sum of $94,297.

Approach

In this matter my task is to:
a)Identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;
b)Determine whether it is just and equitable to make an order altering those interests and if so;
i)Identify relevant contributions and assess them;
ii)Consider relevant matters referred to in s 79(4)(d) – (g) of the Act;
c)Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.

Balance sheet

The settled balance sheet is set out below. Where values are not agreed they appear in bold as determined by me. The reasons for each determination is set out under item numbers following the table:

Assets
Item no.	Title	Description	H value	W value	Agreed/ Determined	Value
1	J	4 E Street, C Town	$1,250,000	$1,250,000	Agreed	$1,250,000
2	J	2 E Street, C Town	$1,550,000	$1,550,000	Agreed	$1,550,000
3	J	H Street, Suburb D	$1,400,000	$1,400,000	Agreed	$1,400,000
4	J	NAB account #…93	$31,250	$31,250	Agreed	$31,250
5	H	NAB account #…60	$7,244	$7,244	Agreed	$7,244
6	J	VV Bank account #…45	$1,379	$1,379	Agreed	$1,379
7	W	NAB account #…43	$359	$359	Agreed	$359
8	W	CBA account #…75	$32,040	$32,040	Agreed	$32,040
9	W	Westpac account #…62	$2,970	$2,970	Agreed	$2,970
10	W	Westpac account #…48	$1,000	$1,000	Agreed	$1,000
11	J	M P/L NAB account #…50 (family trust)	$629,072	$629,072	Agreed	$629,072
12	W	Shareholding in UU P/L	NK	$0	Determined	$0
13	H	Motor Vehicle 4	$17,500	$17,500	Agreed	$17,500
14	W	Motor Vehicle 5	$37,500	$37,500	Agreed	$37,500
15	H	Motor Vehicle 1	$40,000	$40,000	Agreed	$40,000
16	H	Motor Vehicle 2	$20,000	$20,000	Agreed	$20,000
17	H	Motor Vehicle 3	$9,500	$9,500	Agreed	$9,500
18	H	Baby grand piano	$150,000	$150,000	Agreed	$150,000
19	H	3 x shipping containers	NK	$12,000	Determined	$0
20	H	Monies owed by Mr K	$7,548	$7,548	Agreed	$7,548
21	H	Persian carpet	$17,500	$17,500	Agreed
22	W	Rent paid on behalf of Ms SS	$59,068	$0	Determined	$59,068
23	W	Funds paid to Ms SS without the knowledge and consent of the husband from joint funds	$241,000	$0	Determined	$241,000
24	W	Funds paid to Ms TT without the knowledge and consent of the husband from joint funds	$136,500	$0	Determined	$136,500
25	W	Funds drawn from M P/L NAB a/c #…50 without the knowledge and consent of the husband (16.3.20)	$40,852	$0	Determined	$40,852
26	W	Funds drawn from M P/L NAB a/c #…50 without the knowledge and consent of the husband (29.4.20)	$94,297	$0	Determined	$91,092
27	W	Funds drawn from joint account #…93 on 25.3.20	$20,000	$20,000	Agreed	$20,000
28	W	Funds drawn from joint account #…93 in June 2020	$100,000	$100,000	Agreed	$100,000
29	H	Funds drawn from joint account #…93 on 25.3.20	$20,000	$20,000	Agreed	$20,000
30	H	Funds drawn from joint account #…93 in June 2020	$100,000	$100,000	Agreed	$100,000
31	W	Super Fund 2	$348,976	$0	Determined	$0
Total assets			$6,013,374
Liabilities
Item no.	Title	Description	H value	W value	Agreed/ Determined	Value
32	W	Mastercard	$0	$4,964	Determined	$0
33	J	Unpaid rates (Suburb D and C Town)	$4,765	$4,765	Agreed	$4,765
Total liabilities			$4,765
Total net assets			$6,008,609

Items 12 and 24 - Shareholding in UU P/L

The wife has 2 out of 100 shares in UU Pty Ltd. The wife met Ms TT in late 2016 after being introduced to her by Ms SS and purchased goods from her. Ms TT then asked the wife to help her with her business. The wife lent significant amounts of money to Ms TT who also asked the wife to buy a share in her company, UU Pty Ltd. The wife provided Ms TT $136,500 in total. The wife was confident that Ms TT would repay her however Ms TT’s business was not successful. Her business was closed and she told the wife “It closed because I couldn’t pay the rent”.
Ms TT had told the wife late in 2019 that she was broke and her children and her were living on Centrelink and child support payments and that she could not pay anything. The wife deeply regrets the mistake that she made in advancing monies to Ms TT and buying into her company.
Counsel for the case guardian argues that the wife’s evidence about Ms TT should not be accepted as the wife did not call Ms TT and an inference should be drawn that Ms TT’s evidence would not have supported the wife’s contention (Jones v Dunkel (1959) 101 CLR 298).
The wife gave evidence she currently doesn’t know where Ms TT lives and the husband led no evidence that Ms TT’s business is still open.
I assess the shareholding that the wife holds in UU Pty Ltd as having no value.
Counsel for the wife argued that no money should be added back against the wife in relation to the monies provided to Ms TT as it is becoming unfashionable to do so. Counsel for the case guardian argued that the monies provided to UU Pty Ltd without the knowledge and consent of the husband from joint funds in the sum of $136,500 have been lost and that this was a premature distribution of assets by the wife (see Townsend and Townsend (1995) FLC 92-569 (“Townsend”)).
There remains a discretion to add back onto a balance sheet monies which have been lost that would otherwise have been available for distribution between the parties. This is no more than an accounting exercise at the first step and is not an indication that the asset still exists but rather the loss of that asset is to be taken into account. Of course, the accounting for that loss of asset could happen at the second step (the assessment of contributions) or even at the third step (as a matter to take into account under s 75(2)(o) of the Act).
No part of this loss should be visited upon the husband and it is convenient for this amount to be added back to the balance sheet against the wife.

Item 19 - Shipping containers

The wife gives evidence that there are three shipping containers on the C Town property. The case guardian gives evidence that she is aware of only one shipping container. No valuation has been provided and I rejected the tender of a printout from eBay by the wife of an offer for sale of a particular 21 foot shipping container(s) which seemed from the photograph to be in very good condition. Counsel for the wife conceded that there was no evidence of the value of the shipping container and suggested that the matter might be resolved by an order that the number of shipping containers upon the C Town property be ascertained and then be sold and the net proceeds of sale be divided in accordance with the same proportions as the overall distribution of the property between the parties. Leave was not granted to make that application. I am left in a situation where I have disputed evidence as to whether or not there is one or three shipping containers in the husband’s possession and where neither party has sought to provide any valuation evidence in relation to it or them. I shall mark this item nil.

Items 22 & 23 - Ms SS

The wife says that she is a Patron of the Arts and that Ms SS is a talented musician. She played at the parties’ second wedding and over time the wife and Ms SS became close friends. The wife now treats her as a daughter. The husband, the case guardian and the wife spent Christmas 2018 with Ms SS. The wife says that in 2020 Ms SS has been great emotional support to her.
The wife has assisted Ms SS with her rental payments in an agreed amount of $59,068. She has also provided money for living expenses for Ms SS. The additional sum is $241,000.
The wife says that although Ms SS has a successful career, she is not well paid. She is a single mother and due to COVID-19 has not been able to perform. Her current source of income is from part-time teaching. Whilst the wife asserts that some of the payments were made to Ms SS during the period of the time the parties were still together, it seems the payments were made by the wife without the husband’s knowledge and at least some were made anonymously.
It is the wife’s submission that these gifts that she has chosen to make to Ms SS should not be placed on the balance sheet as an addback nor taken into account in any way. It is the wife’s submission that because of the assets of the parties the wife was in a position to offer Ms SS the patronage that she did.
Nonetheless, the drawings from joint capital by the wife to Ms SS without the husband’s knowledge are a premature distribution of capital (Townsend) and should be added back to the balance sheet upon the same understanding as discussed above (Chorn and Hopkins (2004) FLC 93-204).

Items 25 & 26 – funds drawn from M P/L

Counsel for the wife suggested that unless a Kowaliw and Kowaliw (1981) FLC 91-092 (“Kowaliw”) style argument could be mounted and there was some negligence in the payment made by the wife, then no addback should be allowed.
Counsel for the wife pointed to the fact that the wife says that she was living beyond her means and referred to paragraph 135 of her affidavit filed 21 September 2020. He suggests it was not put to her that she had engaged in frolics of her own.
There is no suggestion that the husband was involved in or consented to the withdrawal of the funds from the Reid Family Settlement Trust on either the 16 March 2020 or 29 April 2020.
In a letter from the husband’s lawyers to the wife’s solicitors dated 7 October 2020 (part of Exhibit 4), the husband’s solicitors record that they continued to await disclosure of how the wife had disposed of those withdrawals.
There were five withdrawals of funds on 16 March 2020. The wife’s solicitors in a letter dated 8 October 2020 (part of Exhibit 4) indicate that $10,000 of the withdrawal on 16 March 2020 was the payment to the parties’ younger child for director’s fees in relation to his services as director of M Pty Ltd, the trustee of the family trust. The wife gave no evidence as to what services the parties’ youngest son had provided that would justify those director’s fees being paid to him. It was a unilateral decision by the wife to make the payment. It was without the knowledge of the husband who is the other director in the company. It is appropriate that those monies be added back onto the balance sheet against the wife.
The only other figure in respect of which particulars were given for the withdrawals on 16 March 2020 is an amount of $20,000 which was paid to counsel for legal fees in respect of this case and it is appropriate that that amount also be added back.
In relation to the withdrawals on 29 April 2020 totalling $94,297, they consisted of six withdrawals. The first two related to payments for slashing paddocks (I infer at Suburb D) and a payment of the parties’ accountant. Those two payments combined totalled $3,205 ($550 + $2,655) and should not be added back.
The wife drew $25,000 to make a payment to her former family law solicitor and the husband should not share in the responsibility for that payment.
The wife records that she made a distribution of $41,022.32 “as per the 2019 tax returns for the Reid Family Settlement Trust” to herself. The financial statements for the trust indicate that the whole of the $41,022 was wholly distributed to the wife and none to the husband.
At paragraph 106 of her affidavit filed 21 September 2020, the wife agrees that she received $41,022 from the Family Settlement Trust on 29 April 2020 and deposes “… I need this to pay property related bills… I had some property repairs and maintenance to attend to at the Suburb D property…”.
When she was asked for particulars about this expenditure, the wife’s lawyers in their letter dated 8 October 2020 did not provide any particulars as to what property related bills, repairs or maintenance were the subject of this withdrawal of $41,022.
In summary there are a number of withdrawals on 16 March 2020 and 29 April 2020 where the wife offers no explanation as to the purpose of the withdrawals, saying that she is unable to recall the reason for the withdrawals. During final submission, counsel for the wife pointed to the fact that there was a shortfall on the face of the wife’s financial statement between her stated income and expenses and that that should be inferred to be the explanation. Whilst the wife was not tested on her financial statement, I observe that she has not completed Part N of that document but simply estimated that her weekly living expenses are $1,000 per week. The wife has not given evidence that these unaccounted withdrawals on these two days relate to living expenses and I am not without more prepared to infer that they do.
I have no way of knowing whether or not the husband should in some way share the responsibility of the wife’s withdrawal of this $41,022. Because of the failure of the wife to provide particulars of this expenditure and the assertion by the husband that this amount should be added back to the balance sheet, it is appropriate that I do so.
Apart from the figure of $3,205, the balance of item 26 should be added back onto the balance against the wife, being the sum of $91,092 ($94,297 - $3,205).

Item 31 - Super Fund 2

Whilst the case guardian formally maintained the position that an amount of $348,976 should be added against the wife as the value to her of her interest in the Super Fund 2, during final submissions counsel for the case guardian did not press that position with any vigour.
It is an agreed fact that the wife has an interest in a defined benefit pension in the payment phase. The wife receives $1,540 per fortnight by way of payment from that pension and will receive those pension payments for the remainder of her life. It is also agreed between the parties that that pension has a value of $348,976. The Form 6 that the trustee has provided in respect of that pension indicates that the pension cannot be converted to a lump sum.

The most appropriate way of dealing with this asset in the wife’s hands is to not place its actuarial value upon the balance sheet but rather treat it as a matter when considering s 79(4)(d)-(g) matters. Given that is the conclusion I have reached, it is not necessary to consider whether this asset should be placed in a separate pool.

Item 32 – wife’s MasterCard

There is no evidence in respect of the wife’s MasterCard that would justify this debt being placed on the balance sheet so that in effect the husband became jointly liable for expenditure on that card. I will mark that item as nil.

Item 33 – joint unpaid rates

The parties agreed that they have a joint liability in relation to unpaid rates in respect of the Suburb D and C Town properties in the sum of $4,765. There was no breakdown as to the rates between the properties. It is appropriate that both parties simply bear the responsibility of paying those rates equally.

Should any order be made?

It appears that the parties’ relationship over a 58 year period has now broken down irretrievably and they have been living apart since October 2019. Since separation, they have made no common use of property and it appears will not do so in the future. They remain joint owners of various pieces of real estate and hold other assets jointly, although they have led separate lives since separation. Each seeks an order altering interests in that property. I find that it is appropriate to make a property settlement order.

Contributions

In the final orders sought by the wife in her case outline, the wife sought an overall division of the net assets of the parties as to 64 per cent to herself and 36 per cent to the husband. During final submissions, I incorrectly suggested that the wife had sought a 65/35 split and counsel for the wife did not correct that error. Counsel for the wife was not specific as to how contributions in 79(4)(d) – (g) considerations should be apportioned, suggesting that it could be 55 + 10 or 60 + 5 to get to the overall alteration of property that the wife is seeking, with the adjustment for s 79(4)(d) – (g) considerations being affected by the finding in respect of contributions.
During the hearing the position of the case guardian was that a finding should be made that overall contributions made to the assets at pool, on the husband’s version of the balance sheet, should be considered equal. In final submissions, counsel for the case guardian conceded a 2 per cent adjustment to his version of the balance sheet as a recognition of the receipt by the wife of the $486,000 from the trust established by the estate of the late Mr PP.
The starting point is to acknowledge that this was a very long relationship. It spanned a period of 58 years during which period the parties were together at least 50 years. During that period of time I am satisfied that each party, according to their own talents, contributed directly and indirectly, financially and non-financially to the acquisition, conservation and improvement of many assets which were bought and sold. There were a myriad of relevant contributions over this very long period and it is important that the contributions that have been made over a very long period of time are assessed holistically and in the context of how the parties’ have led their lives.

Financial contributions

The husband was in full time employment from 1961 to 1997. His employment involved physical labour. He retired from paid employment at the age of 64 years. The wife was in paid employment for a short period in the early 1980s and again from 1991 to a date prior to 2008. There is however no evidence as to the quantity of the income that she earned during that period.
During cross examination the wife accepted when taken to her income tax returns that between 2008 and 2017 she sustained annual losses in her business apart from two years where she recorded no income at all.
The parties made profit from the purchase and sale of almost all of the properties they owned during the course of their relationship.
The parties made profit from shares which they held in the name of the Reid Family Settlement Trust and in the Super Fund 1.

Mr PP

The most significant matter that the wife relies upon in relation to contributions is the money that she received from Mr PP whilst he was alive and from his estate.

Forgiveness of loan - $550,000

The wife submits that a finding should be made that Mr PP forgave a loan of $550,000 because of the relationship between Mr PP and the wife and in that sense, a gift was made by Mr PP “on behalf of the wife” (Gosper & Gosper (1987) FLC 91-818). The husband initially argued there was no evidence as to when the funds were advanced but bank statements have been tendered to establish that advance. By the end of the hearing, it was not controversial that in May 2004, JJ Pty Ltd, the trustee of the Reid Family Settlement Trust and a company jointly owned and controlled by the parties, had received two advances from Mr PP, the first on 8 April 2004 in the sum of $300,000 and the second on 26 May 2004 in the sum of $250,000 (a total of $550,000).
The wife met Mr PP at sports club when the children were young. She became good friends with Mr PP and his wife Ms WW and when Mr PP moved to Location YY she and the husband holidayed there and twice stayed with him.
In 1991 Mr PP’s wife Ms WW became very ill and at the request of Mr PP, the wife visited Ms WW in hospital and prepared her Will. She helped Mr PP care for Ms WW during her terminal illness and acted for Mr PP on the probate and administration of Ms WW’s Will. Thereafter she helped Mr PP with a lot of his legal work. His company affairs were quite disorganised and the wife assisted him to get them into order. She did not charge for that work. At an unspecified time, the wife noticed lumps on Mr PP’s neck that were similar to the lumps which caused the death of Mr Hanlon (her second husband) and arranged for Mr PP to see a specialist in Brisbane who diagnosed him with cancer and admitted him to hospital for chemotherapy.
In about 1999 Mr PP commenced a de facto relationship with Ms XX which ended when Mr PP died in 2007.
At paragraph 84 of her affidavit, the wife says that when the husband and she got into financial stress because of the Suburb NN Investment and associated legal proceedings, Mr PP who found out about this stress, approached her to lend $550,000 primarily for legal fees but also for living expenses.
So it is clear that the purpose of the loan by Mr PP was to alleviate the stress created by the litigation to which both the husband and wife were parties and also for their joint living expenses.
Mr PP wrote a note that was sent with one of the cheques and is in the following terms:
Darling, this is a cheque to cover your expenses. You are Ms XX & mine [sic] best pal and we love you so very much. Thanks for all your help and loving care. Bestest love, Ms XX & Mr PP.
The text of this note gives support to the wife’s claim that although the money lent was intended to benefit both parties, the loan was made because of the connection between Mr PP and the wife.
The wife asserted she was close friends with Mr PP’s deceased wife and later with his partner, Ms XX.
The wife points to the fact that, at an unspecified date, Mr PP celebrated the receipt of an award where he only invited the wife and not both the wife and the husband to that event on Location YY.

Forgiveness of the loan

The wife points to part of the motivation of Mr PP’s generosity in the following terms in her affidavit filed 21 September 2020:
82.I acted for Mr PP on the probate and administration of Ms WW’s will. Thereafter I helped Mr PP with a lot of his legal work. His company affairs were quite disorganised and I assisted him to get them in order. As we were friends I often did not charge him for work I did for him.
(Emphasis added)
It can be reasonably inferred that the wife’s personal exertions in her professional role in assisting Mr PP contributed towards Mr PP’s generosity in respect of the forgiveness of the debt of $550,000. It is impossible, on the evidence provided by the wife, to make any guestimate as to the value of the work to Mr PP at normal professional rates as carried out by the wife.
The wife gives evidence that Mr PP later told her that he did not want her to pay him back. He referred to their friendship and wrote a second undated note to the wife in the following terms:
My very dearest Darling, You have been so wonderful helping everything to go right with my new will and the City ZZ affair. I want you to know you owe me nothing and you and I are the only two persons to know. You have been my best pal and always will be. Its beast [sic] to have a secret for two. Don’t ever mention it to me as the loan never existed. I love you so much. I know I’m so lucky to have a darling friend like you. Money means nothing to me now but beautiful friends mean everything. God bless. Love you so much. xxx Me
The wife asserts that she and Mr PP were never romantically involved.
On 18 May 2006 Mr PP made his Will. That Will appointed Ms XX and the wife as joint executors and trustees of his Will.
In Mr PP’s later days the wife travelled and helped Ms XX with the care of Mr PP in his final stages with motor neuron disease and cancer. Mr PP died in 2007. He left an estate of approximately $11 million.
As part of the administration of the estate, Ms XX and the wife caused a letter to be written to the accountant assisting in the administration of the estate. The letter is dated 13 November 2007 and is signed by Ms XX and the applicant wife. It advises the accountant that the executors and trustees of Mr PP’s Will advised that there was to be a “write off loan to Ms Hanlon of $550,000 as previously verbally requested by Mr PP”. As has been earlier discussed, the second note, set out above, corroborates the assertion that Mr PP forgave the debt whilst he was alive.

Conclusion about the $550,000

It is more likely that Mr PP intended to make a loan to the wife, notwithstanding he was aware as to the reasons why the money was needed and would be applied for the joint benefit of both the wife and the husband.
Even if I am wrong about that, the important question is whether or not the forgiving of the loan by Mr PP was a contribution that the wife can point to as being a contribution made only “on her behalf” and not on behalf of both herself and the husband. I am reasonably satisfied that the wife has established that the forgiving of the debt arose out of the relationship between Mr PP and the wife alone.
There is however some substance in the submission by the husband that the relationship between the husband and the wife included a solicitor/client relationship. The wife had done a lot of Mr PP’s legal work, often without charge.
That letter indicates that Mr PP at least in part by way of forgiving the $550,000, was acknowledging personal exertions by the wife in her role as a lawyer in doing such work as preparing Mr PP’s Will and the work she did in respect of the “City ZZ affair”.

Distribution from AB Memorial Fund - $1,560,041 or $486,000?

After Mr PP died, his daughter Ms AC, who was bequeathed $1 million from Mr PP’s Will, made a Family Provisions Act claim which was settled on the basis that she received a further $1 million.
Mr PP’s Will provided for a number of specific monetary bequeaths and provided that the residue and the remainder of the estate be placed in the AB Memorial Discretionary Trust (“the Memorial Trust”) and that Ms XX and the wife have the absolute discretion to apply the capital income or any part of that trust as in their absolute discretion they thought fit to the following classes of discretionary beneficiaries:
a)Any registered charity in Location YY or Australia
b)Any fund for the research into motor neuron disease or cancer
c)Any person on Location YY who in their absolute discretion they believe needs financial assistance for medical or health expenses
d)Ms XX
e)The wife.
The wife has established by way of objective documentation that:
a)On 3 March 2014 an amount of $250,000 was received into the wife’s NAB account from the account of Mr PP’s estate (…70);
b)On 18 November 2014 an amount of $236,000 was received into the wife’s NAB account from the account of Mr PP’s estate (…70)
Given the terms of Mr PP’s Will, I am satisfied that any monies that the wife received from the estate of Mr PP were received by her and not in any joint way by herself and the husband (Kessey and Kessey (1994) FLC 92-495).
At paragraph 89 of her affidavit filed 21 September 2020, the wife says:
In about 2013, Ms XX and I wound up the AB Memorial Fund created in Mr PP’s will by donating $1 million to the AD Institute and we split the residue of $3,120,084. A copy of the estate’s Westpac Bank account statement dated 16 April 2013 is at pages 654 to 655 of H01. My share of the money was deposited into the Super Fund 1 and/or the Reid Family Settlement Trust.
So it is the wife’s evidence is that the residue of the Memorial Trust fund in 2013 was $3,120,084 and that that amount was split evenly between herself and Ms XX, namely she received $1,560,041 and that that money was deposited into either the Reid Family Settlement Trust or the Super Fund 1.
A good proportion of the wife’s cross examination focused on the failure by the wife to establish by way of independent documentation her claim that she had received a total of more than $486,000 from the Memorial Trust Fund.
There is no doubt that there was $3,120,084 in the account in the name of the estate as at 16 January 2013 as exhibited to the wife’s affidavit. The evidence of payments received by the wife though are only the two payments made in 2014. There is no objective evidence that the wife received any other monies from the estate.
Ms XX is 90 years of age but is a person with whom the wife is in communication. Ms XX did not give evidence at the hearing.
Counsel for the wife conceded that the first time that the husband or his case guardian was aware that she asserted that she received $1,560,000 after the beginning of 2013 from a trust established by the estate of the late Mr PP was when she filed her trial affidavit on 21 September 2020. This was in circumstances where since even before the institution of proceedings, there had been a duty for disclosure on the wife and that the parties had been involved in an exchange of information throughout the case and had been to a conciliation conference.
In relation to how the funds received from the estate’s memorial fund were deployed by the wife, the wife says:
a)At paragraph 51 of her affidavit filed 21 September 2020 she suggests that the funds were used to purchase a property at Y Street, Suburb V on 17 July 2013;
b)At paragraph 89 of her affidavit she asserts that the funds were deposited into the Super Fund 1 and/or the Reid Family Settlement Trust.
It is to be noted that the only bank accounts of the estate that are in evidence is the Westpac account ending …70. As at 16 January 2013 that account had $3,120,084. As at 31 January 2014, that account had $2,953,180 (exhibit 5). There is no accounting for the reduction of $166,000 in the account. It is however impossible to say that this account was any significant source of funds for the acquisition by the parties of the Y Street property which was purchased in the joint names of the parties without the assistance of a mortgage. The wife says that the funds for the Y Street purchase came from the family trust of the parties but that monies had been put into that trust from the estate. The wife produces no evidence at all from any of the possible available sources (the conveyancing file, her accountant’s or bank records).
The timing also seems inconsistent. The purchase of the Y Street property took place in July 2013. There was no movement in the memorial trust bank account of any significance in that period and accordingly I cannot accept a statement by the wife that monies were used from the inheritance for that purchase.
As set out at paragraph 89 of the wife’s trial affidavit, the wife asserts these amounts found their way into the Family Settlement Trust and the self-managed superannuation fund (the Super Fund 1). The wife produced a record which purported to record a deposit of $179,975 into the self-managed superannuation fund suggesting that these monies may have come from the estate’s memorial fund. Again, the timing did not seem to correspond with the allegation of the receipt of the balance sum of $1,074,000. Not one record has been produced by the wife that would substantiate how this amount of over $1 million had been used by the wife.
In a letter written by the solicitors for the case guardian dated 7 October 2020 (part of Exhibit 4), the case guardian seeks the following clarification:
DISCLOSURE RE PAYMENT FROM THE AB MEMORIAL DISCRETIONARY TRUST
So that our client can better understand your client’s case in relation to the funds received from the AB Memorial Discretionary Fund (noting we were only advised of this payment on 21 September 2020) can you confirm:
1.That your client now asserts funds were received in 2014 not 2013;
2.That your client asserts that only $486,000.00 was received rather than the previously asserted amount of over $1,560,000.00;
3.That your client can show the funds being deposited into her personal account #…43 (not the Reid Family Settlement or the SMSF) but cannot otherwise not [sic] show how these funds were applied and in particular whether these funds were applied to joint assets.
The answer in the letter of 8 October 2020 (part of Exhibit 4) gives the following information:
The estate of the late Mr PP (“estate”)
1.Our client was the co-executrix of the Estate, which was a long administration spanning more than 7 years and involving a Family Provision Act claim at the Supreme Court by Mr PP’s daughter. Our client was able to locate some Estate bank statements after she filed her affidavit on 21 September 2020, which assisted her recollection of some of the dates of payments.
2.This is not correct. Our client inherited the total of approximately $1.5 million but is unsure as to the dates and individual amounts.
3.Our client cannot recall where the funds received from the Estate were deposited and applied. During the time the Estate was being administered, the parties (solely and jointly) brought 4 properties and sold 4 properties and also purchased the project home for the C Town Property. The Reid Family Settlement Trust and Super Fund 1 were still active. It is likely there was a blending of funds.
The wife did not give any further evidence in chief additional to what she had said in her affidavit.
In cross examination, there is the following exchange between counsel for the case guardian and the wife:
Counsel for the Case Guardian: I suggest to you that you can’t put your finger on a single document because, one, you never received the money or, two, you kept the money somewhere else. Which of those statements would you agree or disagree with?
Wife: Both
Whilst that answer is ambiguous, I took the wife to be saying that she disagreed that she never received the money and she disagreed that she had kept the money somewhere else.
Counsel for the case guardian asserted that the wife was either fantasising about the receipt of these monies or she had not disclosed where she had put them and made the point that it was the wife’s case that she had in fact received these monies.
Counsel for the case guardian submits that if the wife is accepted as a witness of truth and she did in fact receive $1,560,000 from the trust established by the estate of the late Mr PP, then there is $1,074,000 missing.
At the end of his submissions, counsel for the case guardian made the assertion that the Court should make a finding that it does not know what has happened to over $1 million worth of assets which are controlled by the wife.

Counsel for the wife’s final submissions were predicated on an assertion that the monies that the court would take into account in favour of the wife was the sum of $486,000 which was proven to have come from the estate into the wife’s personal account.
On balance I do not accept the wife’s assertion that she received, in addition to the amount of $486,000, a further amount of $1,074,000 from the AB Memorial Fund.

Other relevant contributions

The wife seeks to emphasise particular contributions that were made by her or on her behalf.
These include the following:
a) In 1964 the wife’s father, who was a builder, built a garage on land that the husband owned at the commencement of the relationship. The parties moved into this garage immediately after they were married and lived there until just before the birth of their second child. The wife’s father was not paid for the work that he did in building the garage.
b) The Suburb CC property was then further developed and the wife’s father and brother built a modest home on the property using materials which were purchased by the parties. The parties did not pay the wife’s father and brother for the work which they did.
c) The wife asserted that she played a key role in applying to convert the C Town property into a freehold and the subsequent selling of three lots of that property at a profit to the parties. The wife however qualified as a professional during the period the parties were together and the work that she did was by way of personal exertion in that capacity.
d) Upon the death of Mr Hanlon, the wife’s second husband, she inherited some cash and a stockpile of manufactured aluminium racing plates for racing horses. These were sold by her. Although she could not remember how much cash she received and what she received for the sale of the plates, she gave evidence that the overall amount she received was $50,000.
e) The wife submits generally that she managed the financial affairs of the family throughout, including management from time to time of the family share portfolio.
f) In 1988 the Supreme Court of New South Wales Court of Appeal reassessed the damages the wife was entitled to claim from the NSW Government as a result of injuries the wife received handling a suitcase with a large number of files. As a result of the Court of Appeal’s reassessment, the wife received an award of $429,957. There was no submission made before me as to what part of that award was for past loss of earning capacity and future loss of earning capacity and what part of it was for general damages. It appears from page 8 of the judgment that the trial judge adopted calculations based on the premise that the wife would work until 60 years of age and part of the award related to her reduced earning capacity for that period of time. The wife was 47 in 1988. During the hearing I queried as to whether or not there was a breakdown of loss of earning capacity as opposed to award for pain and suffering. I was not provided with the reasons of the trial judge. My inquiry in relation to the breakdown of the award remained unanswered. On what I have been provided, it seems that a significant amount of the award related to past loss of earning capacity and future loss of earning capacity.
g) The wife seeks to have attributed to her as a contribution based entitlement the fact that the husband retired 23 years prior to herself. It seems however that at least for the period that records have been provided (2008-2017), the wife did not make any taxable income from her personal exertions as a lawyer. It is also conceded that the husband after his retirement, was the party primarily involved in the maintenance and improvement of the C Town properties.
It appears that the husband, who is 9 years older than the wife and was 28 when the parties got married, owned a block of land at that time. This vacant land was purchased in July 1960 for £250.
The case guardian gives uncontested evidence that her father throughout her childhood and up until 1997 worked in paid employment as a tradesperson. I am satisfied that the husband worked hard and diligently in that physical occupation. She also gives uncontested evidence that in the period 1997 to 2020, the husband worked with great vigour to make improvements to the C Town property. Over a period of two years he constructed a major stone retaining wall that was necessary to provide access to the building site situated halfway up the hillside on the C Town property it is agreed the husband will retain as a result of these orders. From early 1990s until 2018 he bred, grazed and sold livestock from the C Town property. He currently receives a small agistment fee for livestock on the C Town property.
In her trial affidavit, the wife says at paragraph 73 “I was the primary homemaker. I fed and cared for the children and carried out the great majority of the domestic duties”.
It is not controversial that the wife was the primary homemaker and parent.
The wife at paragraph 78 of her affidavit says “[The husband] did not involve himself with the children”.
The wife was not tested in relation to that statement but it is inconsistent with the less absolute claim that she made at paragraph 73 and I do not accept that the husband did not involve himself with the children.
When the children were young, the wife suffered from depression and was admitted to hospital on several occasions for psychiatric treatment. Again, that history was not interrogated during the hearing. The wife claimed that her youngest sister, who was at school at the time, bore the responsibility for minding the children at that time. The wife’s “somewhat fragile personality” is referred to in the judgment of the Supreme Court of New South Wales Court of Appeal in 1988.
Whilst the parties were together the wife studied accountancy, started an arts degree at AH University in 1973 and in 1974 transferred to the study of law.

Conclusion in relation to contributions

As indicated, the parties have been involved in a long relationship where many of the assets have been continually held in joint names and financial resources intermingled over a period of 58 years. It is stating the obvious to observe that the parties have made a panoply of contributions over that very long time in their respective spheres and there is no suggestion by either party they haven’t done that to the best of their capabilities, although the wife points to the period after the husband’s retirement in 1997 as a period in which she asserts she continued to produce income by personal exertion. As has been discussed above, the wife’s assertion in that is regard not corroborated by income tax returns that have been provided to the Court.
The wife points to the fact that a large number of the properties brought and sold during the time the parties were together were in the name of the wife, although at times this is inconsistent with the real property dealings exhibited to her affidavit. There is no suggestion however that the wife was involving herself in these activities as a frolic of her own. Most of the properties that were brought and sold during the period that the parties were together produced a profit.
Both parties had an interest in the Reid Family Settlement Trust and the self-managed superannuation fund (the Super Fund 1).
The wife received a third party verdict but a substantial proportion of it related to loss of earning capacity for periods when the parties were substantially together.
The wife has established that as a result of her relationship with Mr PP, was a receipt of the sum of $550,000 in 2004 and $480,000 in 2014 (although an unknown part of that amount is attributable to the wife’s personal exertion for Mr PP).
Counsel for the wife points to the proportion that those amounts represented in raw terms to the overall current pool of assets. That calculation would be 17.1 per cent (1,036,000/6,008,609) and if accounted for in raw terms, would lead to an adjustment in the wife’s favour of about 8.55 per cent.
That contribution, whilst significant, of course has to be viewed in the context of all the other contributions made by both of the parties over in excess of a 50 year period.
Having regard to all of the findings made in respect of contributions, I find that the assets of the parties should be divided as to 56 per cent to the wife and 44 per cent to the husband.

Section 79(4)(d) – (g) considerations

The husband is 87 years of age and the wife is 78 years of age.
Counsel for the wife seeks to rely upon life expectancy tables prepared by AE Pty Ltd that were sourced on the internet and were tendered and admitted subject to relevance. In my view, those tables are of very little relevance. On their face they show that medium life expectancy for the husband is 5.9 years and for the wife is 12.07 years. The document asserts that these statistics were derived from the medium series projections published by the Australian Bureau of Statistics.
In respect of the issue of life expectancy, the Full Court in Fontana & Fontana (2016) FLC 93-688 (“Fontana”) referred to statements made by the Full Court in Lawrie & Lawrie (1981) FLC 91-102 and S & P (unreported Family Court of Australia Fogarty, Lindemayer and Finn JJ 29 April 1997). At [26] in Fontana, the Full Court observed:
The guidance provided by these two cases has been followed in subsequent cases where there has been clear expert evidence, which was accepted, relating to shortened life expectancy of a predictable duration arising from a medical condition (see T & D & Anor [2006] FamCA 1248; Miklic & Miklic and Anor [2010] FamCA 741; Jurlina & Jurlina [2014] FamCA 284).
In this case there is no clear expert evidence relating to shortened life expectancy of a predictable duration arising from a medical condition.
In respect of the health of the parties, the only medical evidence as to the health of either of the parties is one paragraph in a report from the wife’s general practitioner in the following terms:
[The wife] is suffering from chronic severe pain affecting her body and in my opinion she is unable to sit/stand for more than 30 minutes without a break of 10 minutes. The wife is also unable to perform physical activities of any sought for more than 2 hours.
The wife’s evidence in relation to her health is firstly that she is experiencing intense stress as a result of this litigation. She says that in August 2019 she was transported to a hospital by ambulance suffering from bronchitis and broken ribs due to severe coughing. She says her bones are brittle due to osteoporosis. In October 2019 the wife was involved in a serious car accident which resulted in a long stay in hospital. In June 2020 the wife was hospitalised for a week due to chronic back pain. The wife specifically lists a number of health issues:
a)Lupus erythematosus;
b)Chronic obstructive pulmonary disease;
c)The wife observes that when she gets a cold or influenza, it results in bronchitis or pneumonia and frequently requires hospitalisation;
d)Osteoporosis for which she receives injections;
e)Osteoarthritis in her lumbar spine, both knees, both ankles, both feet and her neck. This results in mobility problems;
f)An old injury to the wife’s right brachial plexus;
g)High blood pressure;
h)High cholesterol;
i)Anxiety with attendant sleep difficulties and sleep deprivation;
j)Pernicious anaemia;
k)GORD (reflux);
l)Skin cancers;
m)Severe problems with her teeth; and
n)Depression.
I have no evidence as to whether or not any or any combination of these conditions would shorten the wife’s life expectancy by any predictable duration.
On the other hand, the wife (without objection) provided the following information about the husband’s medical condition in her affidavit at paragraph 145:
[The husband] has suffered from two episodes of atrial fibrillation. He has previously told me “I don’t have long to live”. He also suffers from very low blood pressure.
This evidence needs to be weighed against evidence the husband’s daily physical exertion.
In her trial affidavit filed 21 September 2020, the case guardian offers no evidence as to her father’s health but provides the following information:
98… he is an elderly man but I am aware from my conversations with him and my observations when I stay at the property that he wakes early each morning to “work the farm”. He undertakes weeding and spraying of obnoxious weeks for hours at a time. He undertakes handyman tasks around the house, slashes the paddock with the tractor, moves soil and stone with his frontend loader and fixes the fences. He continues to work long hours.
The wife concedes that the husband continues to “potter around” the C Town properties. I place little weight on what the wife said at paragraph 145 of her affidavit.
Counsel for the wife in general terms made the submission that given the ages of the parties and the fact that life expectancy totals favour women over men, that I would conclude that the wife had before her needs which will span over a longer period than that of the husband. I place little weight on that submission for two reasons. Firstly there is no way of making any reasonable estimate as to what the difference in the life expectancies of the parties are on the evidence that I have and secondly, given the value of the assets that the wife is going to receive as a result of the findings made in respect of contributions, the wife has more than adequate financial resources to cater for whatever her needs are for the rest of her life. This is particularly so given the wife is in receipt of a life pension which at the current time gives her an income of $790 per week (tax free) which has a notional actuarial value of $348,976. The husband has no similar source of income.
The wife says that she currently spends $150 per week on medication.
Counsel for the wife made the point that there has been no accounting for the lack of rent paid by Mr K, who lives in the original holiday home at C Town on 4 E Street and pointed out that Kowaliw was a case about a party not requiring a third party to pay rent when that might have otherwise been available. The wife was and is a joint owner of the property upon which Mr K resides and there is no indication that she at any point made a demand upon Mr K for the payment of rent.
I conclude that there should be no further adjustment for s 79(4)(d) – (g) considerations.

Just and equitable

Based upon the findings in respect of contributions and s 79(4)(d) – (g) considerations, the wife should receive 56 per cent of the net assets and the husband will receive 44 per cent. That distribution could be achieved if the assets were distributed in accordance with the following table:

Husband gets 44.0%
Assets
Item No.	Description	Percentage	Value
1	4 E Street, C Town	30%	$375,338
2	2 E Street, C Town	100%	$1,550,000
4	NAB account #…93	50%	$15,625
5	NAB account #…60	100%	$7,244
6	VV Bank account #…45	100%	$1,379
11	M P/L NAB account #…50 (family trust)	50%	$314,536
13	Motor Vehicle 4	100%	$17,500
15	Motor Vehicle 1	100%	$40,000
16	Motor Vehicle 2	100%	$20,000
17	Motor Vehicle 3	100%	$9,500
18	Baby grand piano	100%	$150,000
19	3 x shipping containers	100%	$0
20	Monies owed by Mr K	100%	$7,548
21	Persian carpet	100%	$17,500
29	Funds drawn from joint account #…93 on 25.3.20	100%	$20,000
30	Funds drawn from joint account #…93 in June 2020	100%	$100,000
Liabilities
Item No.	Description	Percentage	Value
33	Unpaid rates (Suburb D and C Town)	50%	$2,383
Net Assets		$2,643,788
Wife gets 56%
Assets
Item No.	Description	Percentage	Value
1	4 E Street, C Town	70%	$874,662
3	H Street, Suburb D	100%	$1,400,000
4	NAB account #…93	50%	$15,625
7	NAB account #…43	100%	$359
8	CBA account #…75	100%	$32,040
9	Westpac account #…62	100%	$2,970
10	Westpac account #…48	100%	$1,000
11	M P/L NAB account #…50 (family trust)	50%	$314,536
12	Shareholding in UU P/L	100%	$0
14	Motor Vehicle 4	100%	$37,500
22	Rent paid on behalf of Ms SS	100%	$59,068
23	Funds paid to Ms SS without the knowledge and consent of the husband from joint funds	100%	$241,000
24	Funds paid to Ms TT without the knowledge and consent of the husband from joint funds	100%	$136,500
25	Funds drawn from M P/L NAB a/c #…50 without the knowledge and consent of the husband (16.3.20)	100%	$40,852
26	Funds drawn from M P/L NAB a/c #…50 without the knowledge and consent of the husband (29.4.20)	100%	$91,092
27	Funds drawn from joint account #…93 on 25.3.20	100%	$20,000
28	Funds drawn from joint account #…93 in June 2020	100%	$100,000
31	Super Fund 2	100%	$0
Liabilities
Item No.	Description	Percentage	Value
32	Mastercard	100%	$0
33	Unpaid rates (Suburb D and C Town)	50%	$2,383
Net Assets		$3,364,821

There is to be a sale of 4 E Street, C Town. The agreed value of that property is $1,250,000. Based upon the division set out in the table, the wife is to receive 70 per cent of the net proceeds of the sale and the husband is to receive 30 per cent. In the event that the property sells for more than the agreed value, the wife will receive 56 per cent of that increase and the husband 44 per cent. Conversely, if it sells for less than that sum, the wife will bear 56 per cent of that decrease and the husband 44 per cent.

I certify that the preceding two hundred and five (205) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 30 October 2020.

Associate:

Date: 30 October 2020

SCHEDULE 1

That there be an overall division of 64% to the Applicant Wife (the ‘Wife’) and 36% to the Respondent Husband (the ‘Husband’).

Real property

That within 28 days of the date of these Orders, the Husband do all such things and sign all such documents as may be necessary to transfer to the Wife the whole of his right, title and interest in Lot … in Deposited Plan …, known as H Street, Suburb D in the State of New South Wales (the ‘Suburb D Property’).
That within 28 days of the date of these Orders, the Wife do all such things and sign all such documents as may be necessary to transfer to the Husband the whole of her right, title and interest in 2 E Street in Deposited Plan …, known as 2 E Street, C Town in the State of New South Wales (‘2 E Street’).
That within 28 days of the date of these Orders, the Husband do all such things and sign all such documents as may be necessary to transfer to the Wife the whole of his right, title and interest in 4 E Street in Deposited Plan …, known as 4 E Street, C Town in the State of New South Wales (‘4 E Street’).
That within 28 days of the date of these Orders, the Husband secures that Mr K vacates 4 E Street.

Chattels

That the Husband shall retain sole legal and beneficial ownership of the following items:
6.1.The Baby Grand Piano;
6.2.The Motor Vehicle 1;
6.3.The Motor Vehicle 2;
6.4.The Motor Vehicle 3; and
6.5.Three (3) shipping containers.

Funds at Bank

That within 14 days of the date of these orders, each party shall do all acts and things, sign all documents, deeds and instruments and provide all necessary consents to cause for the balance of all funds standing to the credit of the parties in the joint National Australia Bank account …93 to be paid or transferred to the Husband and the account to be closed.

The Reid Family Settlement Trust

That within 14 days of the date of these orders, the balance of the funds in National Australia Bank account …50 to be paid or transferred to the Wife.
That the Husband transfer to the Wife his shares in M Pty Ltd.
That the Wife will do all things necessary to wind up the Reid Family Settlement Trust.
That the Reid Family Settlement Trust be discharged from any obligations it may owe to the Husband.

Other

That the monies owed to the parties by Mr K be paid directly to the Husband.
That the Husband pay the $4,765 in outstanding rates in respect of the real property.
That except as otherwise provided in these Orders the parties are declared to be the sole legal and beneficial owner of all other items of property including, money, insurances, business interests, superannuation interests and entitlements, shares, financial resources, motor vehicles and personal effects currently in the possession or control of each of them respectively.
That the parties are solely liable to pay any and all outstanding loans, debts, taxes or other liabilities in their sole name or arising on their own account as at the date of these Orders and must indemnify the other against any claim in respect thereof.
That in default of either or both of the parties doing all acts and things and executing all such documents as are necessary to comply with these Orders within 14 days of an obligation set by them, a Registrar of the Sydney Registry of the Family Court of Australia, or such other person appointed by the Court, be authorised to do all such acts and things and execute all such documents on behalf of either or both of the Applicant Wife and the Respondent Husband and order that in the event that either party procures compliance with the Orders set out hereunder by obtaining execution of a document or documents pursuant to this Order, then the party procuring such execution shall be indemnified by the other party for his or her costs and expenses incurred in procuring such compliance.
That the Husband pay the Wife’s costs of and incidental to these proceedings.

SCHEDULE 2

Husband’s Proposed Minute of Orders (Exhibit 7):

That within 28 days of the making of these orders that the Applicant wife do all such things and sign all such documents as may be necessary to transfer the whole of her right, title and interest in the property known as and located at 2 E Street, C Town ( 2 E Street in DP …).
That within 28 days of the making of these Orders that the Respondent Husband transfer to the Applicant Wife the whole of his right, title and interest in the property known as and situate at H Street, Suburb D being Lot … in Deposited Plan ….
That within 14 days of the making of these orders that each party shall do all acts and things, sign all documents, deeds and instruments and provide all necessary consents to cause for the balance of all funds standing to the credit of the parties in National Australia Bank Ltd Account …93 (“the joint account”) to be paid or transferred to the husband.
That immediately upon the parties compliance with Order 4 herein the parties shall procure the closure of the joint account.
That within 14 days of the making of these orders the wife pay to the husband the amount of $100,000.00.

Sale of 4 E Street

That within 28 days of the making of these orders that the parties do all such things and sign all such documents as may be necessary to list the property known as and located at 4 E Street, C Town ("4 E Street") for sale on the following terms and conditions:
(a)list 4 E Street for sale by private treaty with such agent as the parties may agree to appoint and in default of agreement with Mr L at N Real Estate ("the selling agent"), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
(b)the sale price at which 4 E Street shall be listed shall be mutually agreed upon by the parties or, in the absence of agreement reached within fourteen (14) days of the date of these Orders shall be $1,250,000.00;
(c)the parties shall each co-operate in every way with the agent including (without limiting the generality of the foregoing):
i.       making the key available to the agent;
ii.      ensuring 4 E Street, including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and
iii.    signing all documents requested by the agents in relating to the listing for sale of the 4 E Street except a contract or agreement for sale which has not been authorised by the parties solicitors.
(d)the parties shall each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale;
(e)the parties shall instruct such solicitor as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within fourteen (14) days of these orders shall instruct such solicitor as may be recommended by the selling agent.
In the event 4 E Street is not sold by private treaty within 6 months of the making of these Orders:
(a)the parties shall list 4 E Street for sale by public auction with the selling agent;
(b)the reserve price for the purpose of such auction shall be such as the parties agree upon or in the absence of agreement $1,250,000.00;
(c)in the event the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of 4 E Street at a price which is not more than 10% below the reserve price;
(d)if 4 E Street remains unsold, the parties shall do all acts and things and sign all documents necessary to immediately relist 4 E Street for sale by public auction again, on a date nominated by the said agent and at such auction there shall be no reserve price unless otherwise agreed by the parties.
On settlement of the sale of 4 E Street the proceeds of sale be paid in the following manner and priority:
(a)all costs and expenses of sale including legal costs and disbursements, agents commission, valuers fees, and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties).
(b)the amounts required to pay all municipal and water rates outstanding with respect to 4 E Street;
(c)the balance then remaining shall be divided between the parties as follows:
i. To the husband an amount equal to an overall division of assets of 50/50;
ii. To the wife – the balance.

M P/L atf the Reid Family Settlement

That within 28 days from the date of the making of these Orders the husband and wife shall do all and acts and things, vote in favour of all resolutions, record al necessary minutes and sign all documents as may be required to:
(a)transfer to the wife, at the wife's cost, the husband's shares in M Pty Ltd;
(b)resign as director of M Pty Ltd.
Simultaneously with the wife's compliance with Orders 6, the wife shall indemnify and keep indemnified the husband and hold the husband harmless for any and all unpaid taxation liabilities (if any) , or any debts, dues, costs, interest and demands whatsoever both at law and in equity which the wife and the company now has or may have at any time or times hereafter against the husband or which may arise in respect of any act or thing done or omitted to be done by the husband up to and including the date of making of these Orders whether by reason of the husband having been an employee and/or director and/or officer of the company and/or by reason of the husband's shareholding within the company and/or any loan account in the husband's name and/or the receipt by the husband of any moneys at any time from the company or otherwise.
That simultaneously with the husband's compliance with Order 6, the husband shall relinquish all of his rights as to all capital and income of the Reid Family Settlement.
That as between the parties, the husband shall retain sole legal and beneficial ownership of the items to the exclusion of the wife:
(a)His NAB account #…60;
(b)The joint VV Bank account he holds with Ms B Reid being account #…45;
(c)The Baby Grand Piano;
(d)The Motor Vehicle 1;
(e)The Motor Vehicle 2;
(f)The Motor Vehicle 3.
That as between the parties, the wife shall retain sole legal and beneficial ownership of the items to the exclusion of the husband of all assets including bank accounts, motor vehicle and superannuation in her control and possession.

Section 106A

That in default of either party doing all acts and things and executing all such documents as are necessary to give effect to these Orders within 14 days of an obligation to do so is set under these orders, and on the Registrar being satisfied of such failure or neglect or default (by the defaulting party) by way of an affidavit evidence only, then a Registrar of the Family Court of Australia at Sydney is hereby appointed pursuant to s 106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders and the party in default shall pay to the other party to this Application that party’s costs and disbursements on an indemnity basis.
That the wife pay the husband's costs of an incidental to these proceedings.

[2020] FamCA 924

30 October 2020

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Property Law

Legal Concepts

Remedies

Costs

Fiduciary Duty

Constructive Trust

Procedural Fairness

Statutory Construction