HOLMES and HOLMES - [2012] FCWA 12

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION:

CITATION: HOLMES and HOLMES [2012] FCWA 12

CORAM: MONCRIEFF J

HEARD: 27, 28, 29 JUNE, 12 DECEMBER 2011, 15 FEBRUARY 2012 & WRITTEN SUBMISSIONS

DELIVERED : 7 JUNE 2012

FILE NO/S: PTW 4080 of 2009

BETWEEN: HOLMES
Applicant Husband
AND
HOLMES
Respondent Wife

Catchwords:

PROPERTY - significant initial contribution - addbacks - limited contribution by one party during the marriage - future needs

Legislation:

Family Law Act 1975 (Cth) s 75(2) & s 79

Category: Not Reportable

Representation:

Counsel:

Applicant: Mr K Wilson SC
Respondent: Ms G Anderson

Solicitors:

Applicant: Shaddicks Lawyers
Respondent: Berrigan Doube Lawyers

Case(s) referred to in judgment(s):

Biltoft and Biltoft (1995) FLC 92-614
Chorn and Hopkins (2004) FLC 93-204
Hickey & Hickey and the Attorney-General for the Commonwealth (Intervener) (2003) FLC 93-143
Omacini and Omacini (2005) FLC 93-218
Pierce and Pierce (1999) FLC 92-844
Pike and Pike [2009] FCWA 19
Stone-Bellinge and Dewar [2011] FCWA 3

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1[Oliver Ernest Holmes] (“the husband”) and [Martha Christine Holmes] (“the wife”) commenced a relationship in February 1992.
2The parties finally separated [in] March 2008 and the marriage, which was not entered into between them until 18 September 2005, notwithstanding the fact they had lived together since February 1992, was finalised by way of a divorce order on [in] February 2010.
3The husband is 52 years of age and the wife is 58 years of age.
4They have one child, [Sally Holmes] born [in] May 1993, now 19 years of age.
5The parties have been unable to reach an agreement as to an appropriate financial settlement between them.
6This matter falls into that class of case often referred to as “farming cases” where one of the parties brought into the marriage active farm assets of significant value, that have been retained and worked through the marriage or relationship and remain largely intact at the conclusion of the relationship.

The applications

7In his application initiating the proceedings the husband sought orders that would require him to pay to the wife the sum of $300,000 by way of settlement of any claim she may have for a property settlement or spousal maintenance, or both.
8The payment was predicated on the basis that thereafter the husband would retain the farming land and associated assets of plant equipment and that he continued to discharge any debt attributable thereto.
9In the papers for the judge filed shortly prior to the commencement of the trial, and after the pool of assets (but not the extent of the liabilities) had been agreed, the husband sought as an outcome to pay to the wife the sum of $450,000 rather than the $300,000 that he had sought in his original application. Based on the liabilities claimed by the husband the proposed outcome represented a division of 30 per cent to the wife and 70 per cent to the husband, in other words a differential in favour of the husband of 40 per cent.
10In her response to the originating application the wife had sought orders that would settle upon her 70 per cent of “the assets of the estate”.
11In her papers for the judge filed shortly before the trial the wife sought a contributions based outcome of 40 to 45 per cent and a further adjustment pursuant to the factors prescribed in s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) of 15 to 20 per cent, giving her an outcome of between 55 and 60 per cent. Her minute of proposed orders expressed, “The husband pay to the wife an amount equal to 60 per cent of the net asset pool (subject to the determination of the asset pool)” and “Such other orders as the court considers just and equitable”.
12In her written summary the wife proposed a two prong approach. The first was based on the premise that I found the asset pool to be as proposed by the wife and in those circumstances the contributions of the parties should be 65 per cent to the husband and 35 per cent to the wife with an adjustment of 5 per cent giving the wife an overall entitlement of 40 per cent.
13In the alternative, if I was to find that the asset pool was as proposed by the husband, with a contribution of the husband of 65 per cent and the wife 35 per cent then I should make an adjustment of 20 per cent for the factors prescribed in s 75(2) of the Act, giving the wife an overall entitlement of 55 per cent of the asset pool.
14In her written submissions the wife submitted, as inherent in the propositions of both, that I should find that the husband’s contribution was 65 per cent and the wife’s 35 per cent.
15In dollar terms the first option would settle on the wife assets of a value of $1,324,707 and the alternative assets of $986,059, based on the pools as respectively represented by the parties at the commencement of trial, although the pool of assets available for distribution ultimately between the parties was significantly different, not only as a result of any adjustment that I have made for the reasons given hereunder, but also as a result of events that followed the conclusion of the evidence.
16I had scheduled delivery of my judgment in this matter for 15 February 2012. On 13 February 2012 I received an urgent application in a case filed on behalf of the husband seeking “leave to re-open and adduce fresh evidence in the form of an up-dated Valuation Report from Bell McMillan & Associates dated 24 January 2012 received by my Solicitors on 10 February 2012”.
17Accordingly I did not deliver judgment on 15 February 2012 as originally contemplated however on that day I made orders giving the husband leave to reopen his case and leave to rely on the updated valuation report.
18I also ordered that the wife have liberty to file and rely on any separate valuation evidence she seeks to adduce and further granted her leave to ask questions of the husband’s valuer as if the same had been filed as a single expert witness valuation.
19On 21 May 2012 the solicitors for the wife advised that “it is agreed between the parties that his Honour can rely upon the second valuations dated 24 January 2012 of Bell McMillan & Associates in his Judgment”.
20The net effect of the additional valuation evidence provided by the husband and admitted pursuant to my order of 15 February 2012 was to reduce the pool of assets from that at trial by $609,911, through a downward movement in the value of the real estate.
21The core dispute between the parties can be identified as four principal issues:
1.The extent of the husband’s liabilities.
2.The characterisation of payments to the wife.

3. The contribution based entitlement of each of the parties.
4.Whether any adjustment is required to be made having regard to the factors prescribed in s 75(2).

Relationship history

22The parties met in 1991 at which time the husband was 32 years of age and the wife was 38 years of age. The husband had not been previously married and was residing with his parents on their farm in [country town B].
23The wife was living in Homeswest accommodation at [a country town C] with the youngest of her three children of an earlier relationship [Bradley], who was then aged 6.
24The wife’s two older children [Katrina] who was at the time 17 years old was residing in [a country town Z] and the second child [Michael] who at the time was 15 years old was residing with his father.
25The wife had previously been employed as a registered nurse at [a country town Y], however, following Bradley’s birth she allowed her registration to lapse.
26Bradley was born with [a disability] and this restricted the wife’s ability to obtain employment. He received a disability pension and the wife received a carer’s allowance.
27The wife deposes to the fact that it had been her intention to return to work as a nurse, however, her involvement in the care of Bradley, the birth of the parties’ child [Sabrina], her involvement in the farm and her health problems had prevented her from doing so.
28At all material times the husband was a farmer. He derived his income from his own farm and from a wage paid to him by his parents for working on their farm.
29At the commencement of the parties’ relationship the husband owned significant property. During the course of the relationship, and following his father’s death, he acquired a half interest in other property with his mother. It is the circumstances surrounding an alleged liability to the husband’s mother as a result of the transaction flowing the husband’s father’s death which creates the single largest area of controversy between the parties.
30In 1993 the parties borrowed from R & I Bank funds to enable them to erect a home on one of the husband’s land holdings. At the time of the husband’s father’s death there was still a balance due to the bank which was subsequently discharged by way of a cash gift from the husband’s mother upon the settling of her late husband’s estate.
31Subsequent to her husband’s death, the husband’s mother also gifted to the husband a share of her partnership that she previously operated with her late husband which was followed by the subsequent cash gift, to which I have referred.
32The parties resided for the most part of their relationship in a home which they had constructed on the farming land.
33The husband continued to be involved in the management of the farm, and of his mother’s property in partnership with her, raising beef cattle and diversifying into olive growing, with limited success later in the relationship.
34Following the parties’ separation the wife has relocated with Sabrina to reside in Queensland with her son Michael and the husband has continued to reside on and maintain the farming property.
35The husband does not enjoy a relationship with the parties’ child Sabrina. At the time of separation it was alleged that the husband had behaved with Sabrina in a sexually inappropriate manner. He was charged and after a three day trial acquitted of the charge.
36I make mention of this fact as in his trial affidavit under the heading “Extraordinary expenses and financial contribution by applicant” and again in his counsel’s submissions, the husband asserts that as a consequence of the allegations made by Sabrina he incurred costs of $56,000 in defending the matter, and to some extent this should be viewed as some form of contribution.
37Whilst I accept that the expense was incurred, the issue was not agitated before me at trial and given the differential burden of proof in the proceedings against the husband in the District Court and the proceedings before me such a finding may not have been the outcome had the matter been so agitated.
38Subsequent to the parties’ separation the husband has continued to maintain the farming property as I have mentioned. The wife has had the benefit of various lump sum payments made to her together with periodic payments, and, as I have noted above, one of the issues that remains outstanding for me to consider in assessing the pool of assets is the extent to which the benefit received by the wife should be included in the asset pool.

The evidence

39The husband relied upon his affidavit sworn 2 February 2011 and a statement of financial circumstances sworn 5 August 2010.
40He relied on the affidavits of the following witnesses in support of his case, namely affidavits of:
[Helen Mary Holmes] dated 2 February 2011 and 22 February 2011;
[Neville Murray Holmes] dated 2 August 2010;
[Dennis Ivan Holmes] 5 August 2010;
[Susan Alice Holmes] dated 5 August 2010;
[Kathryn Denise Lomas] dated 4 August 2010;
[William Robert Lomas] dated 4 August 2010;
[Samantha Gilbert] dated 2 February 2010;
Dr [Karl Walter Bradbury] dated 3 February 2011 and 22 June 2011;
[James Robert Dawson] dated 2 February 2011 and 16 June 2011;
[Debra Logan] dated 29 July 2010; and
[Julia Price] dated 29 July 2010.

41The husband was cross-examined as were his witnesses Helen Mary Holmes, Susan Alice Holmes, Denis Ivan Holmes, James Robert Dawson, William Robert Lomas and Neville Murray Holmes.
42The balance of the husband’s witnesses were not required for cross-examination.
43The wife relied on her affidavit sworn 17 February 2011 and the statement of financial circumstances sworn on 4 February 2011.
44The oral evidence was heard on circuit in [country town K] on 27, 28 and 29 June 2011 and concluded in Perth on 12 December 2011 with written submissions filed by each of the parties thereafter.
45The husband and his witnesses were generally impressive save and except in one specific area namely that relating to the alleged liability of the husband to his mother and the arrangements made for succession planning for the [Holmes’] family farming properties.
46I found the evidence of the husband utterly unconvincing as to these issues. His mother and brother Neville were quite frank about the purpose of the arrangements, to which I will refer later, however entirely unconvincing as to the future expectations of recovering any indebtedness claimed to have been due by the husband to the mother and ultimately to her estate.
47The balance of the evidence of the husband, his mother and brother was in my finding frank and they endeavoured to be as truthful as their recollection would enable them to be.
48The wife was a most impressive witness albeit that her somewhat disarming frankness left her making significant concessions against her own interests and derogated significantly from the position that she had advanced in her affidavit and in argument on her behalf.

The Law

49The approach to be adopted by the Court in determining financial issues between the parties is well settled as the four stage approach set out by the full court of the Family Court of Australia in Hickey & Hickey and the Attorney-General for the Commonwealth (Intervener) (2003) FLC 93-143.
50Firstly, the Court must identify the pool of assets available for distribution between the parties. In this case, that is not a simple task as there is a significant dispute about the available assets.
51Secondly, the Court must make an assessment of the parties’ respective contributions to the property available for distribution. Contributions can be financial, either direct or indirect, non financial and as a homemaker and parent.
52Thirdly, the Court must identify any of the factors prescribed under s 75(2) of the Act that are relevant to the circumstances of the parties and in the circumstances of the parties warrant an adjustment to the outcome achieved through the Court’s determination based on contributions.
53Finally, the Court must then assess the outcome arrived at as a result of the first three steps and determine whether that outcome produces a result that is just and equitable in all the circumstances of the matter.

The asset pool

54The husband asserts the following table represents the pool of assets and liabilities that should be accepted for the purpose of these proceedings.
55The figures represented in the following table are those derived from the valuation report dated 24 January 2012.

No.	ASSETS	Gross Value (HUSBAND)	Gross Value (WIFE)
1.	Property: Land Locations
2.	Lot 1 on [X]/Location [Q] 175.7a @$4,838 pa 100%	$650,000.00
3.	Lot [Z] 178a @$6,460 pa 100%	$950,000.00
4.	Lot [Q] 33.3%	$233,333.00
Sub-total	$1,833,333.00
5.	Lot [R] (C/T held by [H. Holmes] as security 50%	$210,000.00
6.	Lot 2 on [P]/Lot [M] (C/T held by H. Holmes as security 50%	$450,000.00
Sub-total	$2,493,333.00
7.	Partnership Livestock 50%	$102,750.00
8.	Partnership Plant and Equipment 50%	$43,354.00
9.	Partnership Bank A/C @ 31/5/11 50%	$2,093.00
10.	Husband’s Super	$4,000.00
11.	Husband’s household contents	$1,000.00
12.	Husband’s Personal Account	$Nil
12.	Wife’s Bank A/Cs (rounded)	$5.00
13.	Wife’s Vehicle	$6,000.00
14.	Stored Furniture	Not Disclosed
15.	Wife’s personal & household contents	$4,000.00
16a.	Sums paid to Wife	$39,000.00
16b.	Wife’s Costs paid 2008 [sic]	$31,076.00
16c.	Husband’s Costs paid to date	$62,627.00
TOTAL ASSETS	$2,789,238.00
Liabilities
17.	Partnership Farm Overdraft/Equity Loan @ 31.5.11 50%	$134,052.00
18.	Tax – GST (June quarter)	$TBA
19.	Debt to [Helen Holmes] for Lots [R] and [M] from 9/9/99	$774,000.00
20.	Interest to H Holmes 9/9/99 to 9/6/11	$553,410.00
21.	Daily accruing Interest to H. Holmes from 9/9/11 to 9/6/11 @ $137.8356	$37,491.00
22.	Husband’s Debt to Partnership @ 30/6/10	$163,531.00
23.	CGT (if sale)	$20,501.00
TOTAL LIABILITIES	$1,682,985.00
NET ASSETS	$1,106,253.00

56The areas of dispute in the schedule relate firstly to the characterisation of the payments made to the wife (item 16b), secondly to the debt and interest said to be due to Helen Holmes (items 19-21) and thirdly the husband’s debt to the partnership as at 30 June 2010 (item 22).
57Capital Gains Tax (“CGT”) (as specified in item 23) will only be relevant in the event that there is a sale and no evidence was led as to the calculation of what the CGT might be particularly based on the new valuation evidence. I propose to deal with a liability for CGT in the event that a sale is required in my orders and disregard the same as a current liability.

Characterisation of payments made to the wife / add backs

58In Omacini and Omacini (2005) FLC 93-218 at page 79,617 the full court of the Family Court of Australia identified three categories of case where it was appropriate to notionally add back to the parties’ pool of assets. They were identified in the judgment as follows:
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In DJM and JLM the Full Court said at 85,262:
``11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.''
(b)Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
``In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband's receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.''

(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw at 76,644:
``As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.''

59On 3 May 2011 Magistrate Stewart ordered, on the application of the wife, that, “The respondent, [husband] pay to the trust account of the applicant [sic], [wife] the sum of $39,000, such sum to be characterised by the trial Judge”.
60Whilst expressed to be a payment to the trust account of “the applicant” it is clear that her Honour intended the order to require a payment to the trust account of the applicant’s solicitors to be applied for the payment of legal fees, disbursements and other liabilities incurred by the wife.
61Other lump sum payments have been made to the wife, by the husband, as he identifies in his affidavit where at paragraph 193 he sets out payments amounting to $31,076 as follows:
I have paid to the Respondent lump sums as follows which total $31,076.00 as follows:
Altered Cheques:
(1) * 26/03/2008 $1,000.00
(2) * 28/03/2008 $1,106.00
(* both of the above cheques were altered by the Respondent without my consent from $100.00 and $106.00 - refer Annexure “OEH32").
Payments requested by Respondent:
(3) 26/03/2008 $1,970.00
(4) 03/04/2008 $2,000.00
(5) 17/06/2008 $10,000.00
(6) 28/07/2008 $10,000.00
(7) 27/11/2008 $5,000.00
$29,106.00

62Additionally, it is not disputed that the husband made periodic payments following the parties’ separation on 25 March 2008 commencing with effect from 10 April 2008 in varying amounts as follows:
(1)From 10/04/2008 to 09/10/2008 – 26 payments of $500 per week Total $13,000
(2)35 voluntary periodical payments of $100 per week to 23/07/2009 Total $3,500

(3) Voluntary payments of $200 per week from 30/06/2009 to 04/12/2009 Total $5,600
(4) Court ordered spousal maintenance of $500 per week Total to 31 January 2011 $31,500 and continuing

63Further, the husband paid assessed child support albeit at the rate of only $29.67 per month with effect from 18 November 2009. The payment of child support is relevant only to the question of “addbacks” when considering how a payment should be characterised, namely as a form of maintenance or as an advance against an entitlement by way of property.
64The initial payments by way of the altered cheques and the payment made to the wife on 26 March 2008 of $1,970, precede any arrangement for periodic payments. However, the amounts taken by the wife through the altered cheques, exceed what was ultimately considered to be appropriate as a level of periodic maintenance, both on a voluntary level initially at $500 and subsequently on a court ordered basis of $500 per week.
65I propose to reduce the extent of the claim for an addback to the sum of $1,000 to represent what would have been the periodic payments to which the wife may otherwise have been entitled at the rate of $500 per week.
66However, that only affects the period of two weeks prior to the commencement of voluntary payments at the rate of $500, which was ultimately determined by the Court to be an appropriate amount and within the husband’s capacity to meet.
67Arguably between the 9 October 2008 and 4 December 2009 the husband should have been paying spousal maintenance at a rate of $500 per week, which would have amounted to the sum of $31,500 rather than the $9,100 in fact paid during that period.
68If one were to apply such an approach mathematically it could be concluded that the husband had “overpaid” any maintenance expectation by the sum of $7,676 calculated as follows:
Total claim by the husband = $31,076
Less $1,000 maintenance due for the first period of separation prior to periodic payments commencing
Plus $9,100 being the amount of maintenance paid by the husband between 9 October 2008 and 4 December 2009
Less $31,500 than the amount of maintenance that he should have paid if payments had continued at a rate of $500 per week, for the period October 2008 to December 2009
A notional “credit” to the husband of $7,676 would remain.

69I accept however that such a calculation is somewhat artificial and proceeds on certain assumptions as to entitlement and capacity to pay between the period of October 2008 and December 2009 referred to above, however I cannot ignore the initial bargain struck between the parties at $500 per week and the amount then ordered at $500 per week.
70In exercising my discretion I propose to allow an addback of $15,000 given that $20,000 of the lump sum payments was made during a period when the husband was not only paying maintenance at a rate of $500 per week but that the lump sum payments on top of the periodic amount the wife received would have provided a significant benefit to her.
71I am further satisfied that I should add back the entirety of the lump sum payment made pursuant to the orders of Magistrate Stewart. The sum was to be applied to legal fees and other liabilities and during the period when the wife was receiving periodic spousal maintenance at $500 per week. In those circumstances I am satisfied that the sum is properly added back into the pool of assets.
72With those adjustments therefore to the schedule of assets the value of the assets to be considered is $2,773,162.

Liabilities to be included

The debt of principal interest and accruing interest claimed due to Helen Holmes

73As I mentioned earlier in these reasons I was particularly unimpressed by the evidence of the husband, his mother and brother [Neville] as to the existence of this liability.
74The wife relies entirely on the authority of the full court of the Family Court of Australia in Biltoft and Biltoft (1995) FLC 92-614.
75Although senior counsel for the husband has set out at some length passages of the judgment of the Full Court the principles applicable are succinctly set out in the head note as follows:
1.A general practice has developed over the years that, in relation to applications pursuant to the provisions of sec 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities. In the case of encumbered assets the value thereof is ascertained by deducting the amount of the secured liability from the gross value of the asset. Where the assets are not encumbered and moneys are owed by the parties or one of them to unsecured creditors the Court ascertains the value of their property by deducting from the value of their assets the value of their liabilities, including the unsecured liabilities.
2.Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred.
3.Although there is a general rule, it is not absolute, is not prescribed by statute and there are a number of well recognised exceptions. There is no requirement that the rights of an unsecured creditor or a claim by a third party must be considered and dealt with prior to the Court making an order under sec 79, nor is there a rule of priority as between a creditor claimant and a spouse. Those rights, however, cannot be ignored. They must be recognised, taken into account and balanced against the rights of the spouse.
4.There is an obligation on both parties to disclose any significant creditors or any significant claim against either of them by a third party. If, as a result of the order of the Court in the property proceedings, the ability of a creditor or claimant to recover his or her debt or claim is likely to be affected, notice of the Family Court proceedings must be given to that creditor or claimant. He/she may then intervene in the Family Court proceedings and either seek a stay of those proceedings or some appropriate order which recognises his/her rights.
5.The trial Judge was not bound to accept the evidence of H and/or the husband as to the quantum of the debt owed by the husband to H. There was sufficient evidence before him to have enabled him to have determined the amount so owing other than in the general manner in which he did by reference to an upper and lower limit. His failure to do so did not affect the final result and the conclusion which he reached was plainly right. In coming to his decision he took into account and had regard not only to the husband's debt to H but also the magnitude of that debt and the conduct of H in regard to it. The trial Judge was not obliged to determine the quantum of that debt and thus the net value of the parties' property.

76To the extent that any third party is affected by this decision, that third party namely Mrs Helen Holmes, is well aware of the position taken by the wife and well aware of the determination that I have been asked to make. That was abundantly clear from her affidavit and her oral evidence.
77Ultimately it is to be determined by me, on the balance of probabilities, whether or not I accept that the debt due to Mrs Helen Holmes will be paid or a demand for the debt acted upon.
78The circumstances surrounding the original acknowledgment of debt which was executed between Mrs Helen Holmes and the husband on 9 September 1999 are not controversial. The acknowledgment of debt and charge were prepared by solicitors and signed by each of the parties, although extraordinarily enough not witnessed, and then stamped.
79The document was created in the course of a transaction between the husband and his mother following the death of the husband’s late father, when the property had vested in the husband’s mother.
80It was agreed that Locations [R] and [M], being the land identified in Certificates of Title volume [A] folios [B] and [C], were inherited by the husband’s mother upon her husband’s passing.
81An agreement was struck where the husband’s mother transferred to the husband one undivided half share in the land to be held thereafter as joint tenants.
82The consideration was the sum of $774,000, which was not paid but rather the parties entered into the acknowledgment of debt and charge to which I have referred.
83In the affidavit filed by Mrs Helen Holmes she deposes as follows:
46.When my husband died I inherited all his share of the farm. This included the land, the contracting equipment and the partnership assets.

47. I gave [OLIVER] his father's half share in the partnership.
48.When [Ernest] died Oliver was left with me to run the farm, I decided I couldn't expect him to run the farm if he didn't have more of the land and a greater say in it. Under my husband's Will I became the sole owner of [Locations] [R] and [M]. I decided that I would bring Oliver's name onto the titles as a half owner but I wanted to secure payment to me for the value of the land. I instructed my solicitors to prepare a document showing that Oliver owed me the value of the farm that was transferred him. I wanted to be sure that if anything happened between Oliver and myself that he couldn't run off with the farm.
49.I based the value on advise [sic] I got at the time and the values used for the Probate of my husband's estate.
50.Under the agreement signed by myself and Oliver he owes to me $774,000.00. I have made a demand against that debt. On my death that debt is payable to my estate.

51. I have made a Will. Oliver is not a beneficiary under my Will.
52.Had I thought that [Martha] could claim my farm because I put it in Oliver's name I would not have done so.
53.Oliver owes me the value of the land and I want the debt acknowledged.
54.I am sad for Oliver that the relationship with Martha has broken down. Between them, their relationship seemed to be alright.
55.I am aware that Martha had access to quite a lot of money on a weekly basis from the farm income. This was because money was taken out of the farm account. Martha seemed to be someone that if she had the money there she had to spend it,
56.It has been explained to me that Martha has an entitlement to a financial settlement with Oliver. That is between them.

57. I object to Martha claiming my farm and home.

84The matters deposed to by Mrs Holmes also need to be considered in light of the events that occurred post-separation. Firstly, a demand for the payment of interest at 6.5 per cent from the date of acknowledgment of debt and charge, that is 9 September 1999, there having been no demand prior to separation, and where there is no suggestion of disharmony between the husband and Mrs Helen Holmes
85Secondly, the manner of holding Locations [R] and [M] was changed from joint tenants to tenants in common, the position being that there was thereafter no survivorship as between the husband and his mother as originally intended.
86Thirdly, Mrs Helen Holmes altered her will to exclude the husband as a beneficiary, the relevant portions of her current will now providing for the sale of a property she holds at a country town B and for the proceeds to be divided one sixth each to her daughters, [Millicent] and [Brooke], and the remaining two thirds to her son Neville. Neville also receives the residue of the estate, which naturally includes Mrs Helen Holmes’ interest in the partnership with the husband, the land that she holds with the husband, now as tenants in common, and any entitlement his mother has to the repayment of any debt due to her.
87Neville Holmes is the husband’s brother and a retired farmer. He was previously a dairy farmer and still holds an interest in land, a portion of which is worked by the husband and Mrs Helen Holmes in their partnership. He owns separate land which he had previously farmed but no longer does.
88It was clear from the evidence of Mr Holmes that prior to the alteration of Mrs Helen Holmes’ will there had been some discussion. He was aware that under his father’s will that it was his father’s intention that the husband should receive the bulk of the estate in the event that Mrs Helen Holmes had predeceased him.
89Mr Neville Holmes explained the arrangements under his late father’s will arose “as a result of the care that Oliver had given their parents over the years”.
90Mr Neville Holmes did not know when the debt from the husband to Mrs Helen Holmes was to be paid.
91Mr Neville Holmes said that he understood as a result of the discussions with his mother regarding the new will that her intention was to keep the farm in the family, said to be as a result of a “concern that [the husband] had no son and I did”.
92This begs the question as to why the issue was not addressed in any earlier will which clearly could have allowed for such a contingency.
93Further the position in Mrs Helen Holmes’ current will is at odds with the arrangements made for the passage of the parents’ estate to Neville and the husband previously.
94Mr Neville Holmes is appointed as executor of his mother’s estate and stands to inherit significant farming interests, to the exclusion of his brother, the husband.
95Mr Neville Holmes has three sons however none of them are farming “at the moment”. One son is involved in banking and the others in mining. There is no evidence before me of any fixed or floating intention on behalf of any of them to work their father’s existing property or any other property that their father may acquire by way of inheritance.
96Whether Mr Neville Holmes would call in the debt as executor of the estate was an issue of some uncertainty for Mr Neville Holmes.
97In his evidence the husband was clear that if such a demand was made that would effectively be the end of the husband’s farm holdings and his ability to farm.
98Mr Neville Holmes’ evidence was that if it was “needed” to call in the debt he would “if that was the law”.
99He was entirely unconvincing in my assessment and would not commit to a proposition that would require the husband to sell the property, which such a demand would inevitably do.
100My assessment of the presentation of Mrs Helen Holmes was that whilst I considered her to be a witness of truth about matters other than this particular issue, she was determined in her resolve to keep the farm as far from the reaches of the wife as possible.
101It is also noteworthy that documents produced from the partnership bankers, albeit not signed by the husband or his mother, but clearly based on information that could only have come from them, did not disclose the existence of the debt from the husband to his mother, consistent, in my view, with an absence of expectation that the debt would ever be payable.
102I find that the arrangements entered into between the husband and his mother were constructed for the purpose, consistent with Mrs Helen Holmes’ resolve, of keeping the farm as far from the reaches of the wife as possible, and whilst there was no application before me pursuant to s 106B to set aside any of the relevant transactions, it is still open for me to find that the probabilities are that the debt will never be repaid nor will a demand be actioned upon. Accordingly, having regard to the principles set out by the Full Court in Biltoft (supra), I so find and therefore disregard the principal and the interest accumulated and accumulating thereon pursuant to the terms of the acknowledgment of debt and charge of September 1999.
103That of course is not to say that I will disregard the significance of the contribution made by the passage of the interest in the land to the husband.

The husband’s debt to the partnership

104In her papers for the judge the wife agreed the figured claimed for the business equity account (subject to updating) and the debt to the partnership specifically in the sum of $163,531.
105The wife presented her case on the basis that she agreed total liabilities of $275,998.04, which now, with the updating of the equity account, would amount to the sum of $297,583.
106It was not identified as an issue in dispute although the husband was cross-examined about the partnership accounts.
107In his affidavit [James Dawson] the accountant for the partnership identified the proprietorship equity in the partnership as being for Mrs Helen Holmes $128,487 in credit and for the husband $163,513 in debit based on the 2010 financial accounts.
108In the financial year ending 30 June 2010 the husband had an opening debit balance in his partnership account of $94,190. He received a distribution of profit of $15,226 and took drawings of $82,844 and paid tax of $1,723.
109A significant portion of the drawings taken by the husband are represented in his legal fees.

110As identified by the full court of the Family Court of Australia in Chorn and Hopkins (2004) FLC 93-204, if post-separation borrowing to fund legal fees are taken into account then the sum expended on legal fees is added back, or conversely, if legal fees are added back, so too should be the debt for the same.
111Additionally, the husband was meeting a liability of $500 per week pursuant to the order of Magistrate Stewart made 16 December 2009, which although made as an urgent interim order pursuant to s 77 of the Act, has continued.
112Even if non-cash items were added back to the husband’s income, it would fall short of his capacity to meet the ordered sum, the only “non-cash” item in the profit and loss account, for the partnership being an allowance for depreciation of $17,510.
113In her written submissions, counsel for the wife identifies the issue as follows, “There are other add backs significantly the claim of the husband’s debt to the partnership of he and Helen of $163,531 and other add backs claimed by the husband broadly relating to funds received by the wife since separation”.
114It would appear that counsel has fallen into error in suggesting that the debt of $163,531 is a joint debt of the husband and his mother when clearly in the accounts it is a debt of the husband. Although in further submissions the debt is referred to as follows:
The husband asserts that he owes the [AQ and PB] partnership (the new partnership) the sum of $163,531. The wife disputes this.
The wife’s position is that the 2010 accounts and earlier accounts of the partnership, for example FYE 2000 and 2001 conflict with the evidence of the husband. The true position is that following the husband’s death Helen Holmes gave to the husband a ½ share in the farming partnership of her and her husband.
The partnership assets of the late Mr [Ernest Holmes] were valued for the purpose of probate at $50,250. This does not include the contracting plant and equipment which does not appear to form part of the old partnership. The contracting equipment is valued separately in the schedule of assets and liabilities for Probate [presumably therefore not forming part of what counsel has referred to as “the old partnership”]. The husband’s evidence is that he benefited to a value of $88,500, which is ½ of the farming partnership and contracting equipment.
The husband had his own farming business which became part of the new partnership. The first year of the new partnership (2000) returns show the husband’s capital introduced as $19,991 and Helen $111,887.

115In her submissions counsel for the wife extrapolates the position as follows:
16.It is difficult to understand on the available evidence how these figures were arrived at.
(a)The last old partnership returns value the partnership at $85,242.
(b)The probate value of ½ of the old partnership is $50,250
(c)The husband claims that at the date of commencement of cohabitation (1992) he had plant and equipment and cattle valued at $80,974 (HTA 66). In 1992 the husband values the livestock at $476 per head (OEH 3). At 30 June 1999 the husband states that he had 106 head of livestock plus my own plant equipment. (HTA 112) - using 1992 values asserted by the husband 106 x $476 = $50,456. In fact the accounts of the old partnership show a turnover in 1999 of $42,391 (OEH 23) and of the new partnership in 2000 of $128,968 (OEH 24). The wife submits that this is evidence of the value the husband brought to the new partnership.
(d)As mentioned above the husband received ½ of the old partnership and contracting equipment valued at $88,500 according to Probate.

17.The first new partnership accounts were prepared by the firm of the accountant of Mr James Dawson who gave evidence. He did not have a clear memory of what had occurred but believed that the firm was instructed to prepare the returns on the basis that the old partnership would form part of Helen's capital contribution to the new partnership and the husband the value of his farming business. Based on the trial evidence (and using the figures in the financial returns 2000) the correct starting point for the capital introduction of Helen and Oliver should have been - Helen ($111,887/2) and the husband (111,887/2 + his farming business value = $$19,991). As set out in (e) it is not clear as to how these figures were arrived at.
18.Based on the evidence the wife asserts that it is not possible for the Court to make a finding that the husband owes the partnership the amount claimed by the husband. In summary:
(a)The new partnership returns are in conflict with the evidence
(b)The figures used in the returns cannot be reconciled
(c)There is not sufficient evidence for the Court to alter the initial capital contribution of the partners and then compile the current capital accounts.

116As counsel properly observes in conclusion, “There is not sufficient evidence for the court to alter the initial capital contribution of the partners and then compile the current capital accounts”.
117As no issue has been previously agitated as to the husband’s capital position in the partnership, it previously having appeared as an agreed fact, and there is nothing in cross-examination that does anything other than support the fact that the husband has properly utilised drawings against the partnership to meet liabilities, I reject the claim by the wife that the debt should be “added back” or otherwise disregarded.
118The position with respect to the partnership accounts is in my finding different from that asserted with respect to the acknowledgment of debt and charge to which I have referred earlier in these reasons. The partnership accounts are an active ongoing and a dynamic representation of the partners’ capital positions in the partnership and the excess of drawings taken by the husband to meet liabilities should not in my finding be disregarded.
119I conclude therefore that the assets of the parties total $2,773,162 and the liabilities $297,583, giving a net asset position of $2,475,579 of which the wife has the present benefit of the sums added back totalling $54,000 and the other assets in her possession identified as having a value of $10,000 which totals $64,000 and the husband the balance, set out as follows:

No.	ASSETS	Gross Value (HUSBAND)	Gross Value (WIFE)
1.	Property: Land Locations
2.	Lot 1 on [X]/Location [Y] 175.7a @$4,838 pa 100%	$650,000.00
3.	Lot [Z] (FMH) 178a @$6,460 pa 100%	$950,000.00
4.	Lot [Q] 33.3%	$233,333.00
Sub-total	$1,833,333.00
5.	Lot [R] (C/T held by H. Holmes as security 50%	$210,000.00
6.	Lot 2 on [P]/Lot [M] (C/T held by H. Holmes as security 50%	$450,000.00
Sub-total	$2,493,333.00
7.	Partnership Livestock 50%	$102,750.00
8.	Partnership Plant and Equipment 50%	$43,354.00
9.	Partnership Bank A/C @ 31/5/11 50%	$2,093.00
10.	Husband’s Super	$4,000.00
11.	Husband’s household contents	$1,000.00
12.	Husband’s Personal Account	$Nil
12.	Wife’s Bank A/Cs (rounded)	$5.00
13.	Wife’s Vehicle	$6,000.00
14.	Stored Furniture	Not Disclosed
15.	Wife’s personal & household contents	$4,000.00
16a.	Sums paid to Wife	$39,000.00
16b.	Wife’s Costs paid 2008	$15,000.00
16c.	Husband’s Costs paid to date	$62,627.00
TOTAL ASSETS	$2,773,162.00
Liabilities
17.	Partnership Farm Overdraft/Equity Loan @ 31.5.11 50%	$134,052.00
18.	Tax – GST (June quarter)	$TBA
19.	Debt to Helen Holmes for Lots [R] and [M] from 9/9/99	Disallowed
20.	Interest to H Holmes 9/9/99 to 9/6/11	Disallowed
21.	Daily accruing Interest to H. Holmes from 9/9/11 to 9/6/11 @ $137.8356	Disallowed
22.	Husband’s Debt to Partnership @ 30/6/10	$163,531.00
23.	CGT (if sale)	Disregarded
TOTAL LIABILITIES	$297,583.00
NET ASSETS	$2,475,579.00

Contributions

120As I have recorded earlier at the commencement of their relationship in February 1992 the parties resided in a rented house in a country town B some 10 kilometres distance from the farm.
121The husband assumed financial responsibility for the wife and also for her son Bradley who at that time was 7 years old.
122The wife did not work and devoted her time to caring for Bradley and after Sabrina’s birth continued in the role of home-maker and parent and was supported financially by the husband.
123The wife did not receive any financial assistance from Bradley’s father.
124At the point of cohabitation the husband had the following assets:
1. Farm land comprising:
(a)Location [Y] of 175.7 acres
(b)Location [Z] of 179 acres
(c)Location [Q] of 54 acres

2. Cattle, which the husband estimates at 141 head
3. Plant equipment including a motor vehicle
4. Some cash at the R & I Bank

125As to values, the husband ascribes a value to the land in total of $490,460, to the cattle in total of $67,116, to the plant and equipment in total of $13,858 and to the cash in total of $7,880. This totals $579,314, subject to a liability of $5,719 to the R & I Bank being one third of a debt taken to enable the purchase of Location [Q].
126The provenance of the husband’s farming land is that Location [Y] was gifted to the husband by his father, who retained the adjoining Location [M]. The gift was made after the husband returned to work on the family farm in 1979 for wages at the age of 20, having left school at 16 and worked on other farms in the country town B area. The husband continued to work on the family farm as well as his own land and was in receipt of a wage from his parents.
127In 1983 the husband purchased Location [Z] being 178 acres from his grandfather for the sum of $72,000. The purchase was funded by way of a loan from the Commonwealth Bank for $60,000 to supplement the funds held by the husband. The loan had been discharged by the time that the parties commenced their relationship.
128In November 1988 the husband’s parents and the husband purchased a further 161 acres of farmland from a neighbour for the sum of $144,000. The husband’s parents owned two thirds and the husband one third. The borrowings taken to purchase the land were all but discharged at the time that the parties commenced cohabitation.
129Following cohabitation there was discussion with the husband’s parents about the building of a home on Location [Z]. A loan was taken for $100,000 to fund the building of the home however the bank required and approved the loan in the name of the husband and his parents. The husband however was responsible for the discharge of the debt, which was secured over land he held, namely Location [Z] and over land which he held with his parents, namely Location [Q].
130The husband’s parents traded in a partnership with the title [“EO & AQ Holmes Farmers]”. The husband’s father also undertook contract bulldozing work which required him to be absent from the farming property, the management of which was left to Mrs Helen Holmes and the husband.
131In 1984 the husband’s father gifted a parcel of land comprising Locations [J] and [K] to the husband’s brother Neville. However the gift was conditional upon the land being available for the continued use of the husband and the parents and continues to be operated and utilised as a part of the farming enterprise undertaken by the husband and his mother.
132The husband’s efforts in his parent’s partnership continue to be renumerated by way of wage.
133The husband’s father died in January 1999 at which time the husband’s mother acquired her late husband’s interest in the partnership, by survivorship acquired his interest in Location [Q] and inherited Locations [R] and [M]. The value of the husband’s father’s estate was determined for probate to be $2,051,607.90.
134Following the death of the husband’s father the husband and his mother commenced a partnership trading as AQ & PB Holmes on [in] July 1999.
135The husband’s evidence is that as at 30 June 1999 he had approximately 106 head of livestock together with some plant and equipment, which was combined with his mother’s livestock, plant and equipment.
136As I have referred to earlier, in September 1999 the husband’s mother transferred a half interest to the husband in the 310 acres comprised of Locations [R] and [M] for the sum of $774,000. The consideration was said to be based on the value utilised for the grant of probate and the local knowledge of each of the husband and his mother.
137Location [M] comprises of the land upon which is the former family home, where the husband’s mother still lives, together with the associated outbuildings.
138For the reasons I have given earlier herein I have determined not to allow as a liability the debt contracted for between the husband and his mother under the terms of acknowledgment of debt and charge but to treat the transfer from the husband’s mother to the husband as a significant contribution.
139In August 2000 the husband’s mother gifted to him in the sum of $65,779.03 for the purpose of discharging the balance of the loan taken to erect the home occupied by the husband and the wife on Location [Z].
140The husband’s farming enterprise involved the raising of cattle. In 1998 he diversified to the planting of olives which initially involved the planting of 1,000 trees. The husband deposes to the fact that he was assisted in this by [Ivan Holmes] (his cousin), Ivan’s wife [Susan], the children Sabrina and Bradley, and Ivan and Susan’s children, [Byron] and [Annabel]. The husband deposed to the fact that the wife only had very limited involvement in the first planting of olives. There was a subsequent planting of a further 1,200 trees two years later. Initially the harvesting was undertaken by hand and the husband says that the wife made only a very modest contribution that was not consistent throughout the harvesting period. It was, he says, his mother who provided morning and afternoon teas and lunch for all of those involved.
141In 2006 the husband had commenced using a machine to assist with the harvesting of olives leaving only those olives missed by the machine for handpicking. The husband acknowledges that the wife assisted with the residual handpicking and further that she and her son Michael occasionally assisted with pruning the olive trees.
142In June 2006 the husband suffered a serious accident resulting in the loss of one finger and the joints in his three remaining fingers being crushed. He was unable to undertake farm work for a period of eight weeks during which time his brother Neville, his mother and cousin Ivan maintained the property. The husband ultimately received a lump sum settlement payment from his income insurance of $30,000.
143The wife has not been included in the partnership, nor involved in the financial management of the partnership, which was undertaken and remains being undertaken by the husband’s mother. The husband also asserts that the wife took only a minimal part in the day-to-day operations of the farm with the husband being helped as required by his cousin Ivan who has an adjoining property. Similarly the husband is assisted by Neville from time to time and by his mother.
144The farm provided all of the financial support for the family comprising the husband, the wife, Sabrina and Bradley, including in the case of Bradley the payment of private school fees until grade 5. It also facilitated the ongoing relationship between all of the wife’s children who at time would come and stay at the farm and also assist in doing jobs about the farm or otherwise through travel to their respective places of residence.
145The husband asserts that the wife received child endowment/family tax benefits however that she retained these for personal use. I accept that the family was the ultimate beneficiary however of such payments.
146The wife was otherwise provided with housekeeping and household accounts being met through the farming partnership.
147In Pierce and Pierce (1999) FLC 92-844 at page 85,881 the Full Court (Ellis, Baker and O’Ryan JJ) said:
28. In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.

148Historically this Court had been reluctant to make qualitative assessments of the contributions of a non-financial nature made by a spouse where such contributions have comprised principally the homemaking and parenting role.
149The facts in this matter, however, cast into very sharp relief the fine line that is to be drawn between a qualitative contribution and a quantitative contribution.
150In this case there is no doubt that the wife must have struggled to make a contribution of significance.
151Whilst she deposes to having made a contribution to the operations of the farm and having contributed as homemaker and principal carer for Sabrina and Bradley, I find that the wife has overstated her contribution and I refer to evidence of the husband, his mother, Mr Dennis Ivan Holmes, his wife Susan and a neighbour [Kathryn Lomas].
152Kathryn Lomas who was not required for cross-examination deposed to the following:
1.That she never recalled seeing the wife helping out or being about on the farm.
2.That the wife banned the husband from coming to their home notwithstanding a long standing friendship with the husband and his family.

3. That the wife’s presentation was quite often erratic and irrational.
4.That the wife was a heavy drinker and consumed a significant amount of medication.

153Ms Lomas’s evidence greatly encapsulates the evidence of the other witnesses who were unshaken in their cross-examination as to the minimal nature of the involvement by the wife in the farming enterprise, although Ms Susan Holmes quite fairly agreed that the wife was a good housekeeper and the children were “turned out well”.
154The wife as I have recorded was, but for the overstatement of her involvement in the farming enterprise, largely a very credible witness, at times quite disarmingly so when describing her addiction to prescription medications.
155She acknowledged that the husband worked long hours and did a good job as a farmer. She also acknowledged that he had a good relationship during the subsistence of the marriage with Sabrina and Michael although she did not accept that he had a good relationship with Bradley but acknowledged that he did offer financial support.
156A portion of the husband’s case was that he undertook a significant body of the cooking, ironing and housework. The wife conceded that he did so “when I was ill or in hospital”.
157Attached to the affidavits of Julia Price and Debra Logan are, respectively, the medical records maintained by the [Country Town B Medical Practice] and the [Waterway Medical Centre]. These detail an ongoing and significant involvement with each of the practices and the ongoing prescription of drugs to which the wife accepted she had become addicted including oxycontin, valium and mogadon. In a schedule annexed to the husband’s affidavit prepared by reference to periods when the wife was hospitalised or attending medical practitioners in country town B, country town C or elsewhere it is suggested that there was in excess of 384 attendances, consultations or hospital admissions in a ten year period.

158The husband deposes in his affidavit that the wife regularly used diazepam, keflex, oxycontin, oxynorm, stemetil, tramadol and valium as well as some eighteen other prescription drugs.
159Logically, he deposes that the wife’s capacity to contribute was diminished as a result of the effects of such drugs, which, it was accepted, would have significantly impaired the wife’s ability to function effectively or safely. Further he deposes that the opportunity for her to contribute was diminished by periods when she was pursuing the numerous medical practitioners that she attended upon to obtain prescriptions and the time when she was affected thereby.
160There is no doubt that the husband made the overwhelming, if not close to the entire, financial contribution to the household. Additionally, the responsibility for maintaining the household very largely fell upon him as a result of the wife’s incapacity or lack of opportunity to contribute. Further, there was a financial impost upon the household as a consequence of the wife’s addictions.
161I accept that the wife made some contribution towards the farm but that it was minimal as suggested. I accept that the wife made some contribution towards the household but again that it was limited.
162I find that the husband made the overwhelmingly greater contribution than the wife initially and continuing during the period of cohabitation.
163As to post-separation contribution the husband has continued to maintain the farming property and has made a significant contribution financially to the support of the wife including periodic and non-periodic payments in excess of $85,000, whilst having returned to him from his farming enterprise a very modest income.
164The wife has continued to provide in a physical sense for Sabrina although it is not clear to what extent she is assisted in that by her son Michael.
165During the course of her submissions counsel for the wife referred me to two decisions of this Court dealing with interests in farming properties. They were Pike and Pike [2009] FCWA 19 and Stone-Bellinge and Dewar [2011] FCWA 3. Pike (supra) was a decision of Crooks J and Stone-Bellinge and Dewar (supra) was an earlier decision of mine.
166Each of the cases is distinguishable on its facts in that in Pike (supra) and Stone-Bellinge and Dewar (supra) the wives respectively made a very significant positive contribution to the maintenance, improvement and financial support of the assets brought into the relationship by the husband.
167The contribution made by each of the wives in those matters was significantly superior to that made by the wife in this matter and accordingly I distinguish the two matters given the significant factual differences and conclusions on contribution.
168Counsel for the husband in opening and in written submissions urges that I should find contributions in the ratio of 80 per cent to the husband and 20 per cent to the wife, a submission with which I agree and I so find.

Section 75(2) factors

169The following are the factors that I consider to be relevant to the determination of the dispute between the parties.
170I have omitted a reference to any of the factors that I do not consider to be relevant.

The age and state of health of each of the parties

171The husband is presently 52 years of age. He has ongoing health problems, particularly a weakness in his back, which limits his ability to undertake tasks as a consequence of that, an injury he sustained to his shoulder in July 2010 and the traumatic amputation of his left hand to which I have referred earlier.
172I accept however, that the husband will continue to work in the farming enterprise so long as he is physically able to do so.
173The husband’s assertions as to his state of health are supported by Dr [Bradbury].
174The wife is presently 58 years of age. She has arthritis and says she is currently being treated for depression and is taking antidepressant drugs. She says that she has high blood pressure and that she suffers from “severe pain” as a result of her arthritis however she has not had exploratory surgery as she is still on the public hospital waiting list. There is no independent assessment of the wife’s state of health however I accept that she is likely to have some residual disability as a result of her history of substance abuse.

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

175The husband will continue to work the farm for as long as he is able to do so and subject to him being able to retain the property and satisfy the orders I propose to make.
176In the event that he does not retain the farm he will still, in my assessment, have a significant capital resource available to him and he is a man who impressed me as someone who lives modestly.
177His capital position, although unlikely to be realised in the near future, subject to the reservation as I have observed, is likely to always be superior to that of the wife.
178The wife’s income position is somewhat curious. She says in her trial affidavit that she has attempted to seek employment at several nursing homes however she has been advised that they would not take her due to her current health problems.
179She says that she has applied for jobs however she needed to update her qualifications.
180Her evidence in cross-examination was that she did not think that she could do the jobs that she applied for, however she needed to make the applications for Centrelink purposes.
181Given the wife’s claims as to her state of health it struck me as somewhat odd that the wife would need to make applications for Centrelink purposes, which are consistent with her being on a Newstart allowance where one is to actively seek employment rather than being on a disability benefit. The wife has not included the nature of the benefit that she receives in her respective statements of financial circumstances.
182She has also indicated that she is thinking of studying social work and that if she “could get part-time work she should”.
183The evidence of the wife is somewhat at odds with her claims as to the extent of her disabilities and as a result there is uncertainty about her capacity for gainful employment.

Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years

184Sabrina continues to reside with the wife and she is the only child of the marriage. She turned 19 years old in May 2012. While she was at school she received Abstudy. The administrative assessment of child support would have come to a conclusion at the end of Sabrina’s year 12 school year. She hoped to progress to university, however the issue of adult child maintenance was not raised with me during the course of the hearing and it is not known what future arrangements for Sabrina’s financial support would be necessary or appropriate.

Commitments of each of the parties that are necessary to enable the party to support:

(i) himself or herself; and

(ii) a child or another person that the party has a duty to maintain

185In November 2009 the wife swore a statement of financial circumstances in support of her application for urgent spousal maintenance. She deposed that her outgoings on a weekly basis amounted to approximately $500, which became the subject of an order. Those outgoings included Sabrina’s outgoings and to some extent the order for spousal maintenance has been de facto an order for the variation in the assessment of child support.
186In her more recent statement of financial circumstances the wife has not deposed to her recurring expenditure.
187The wife does not depose to her future expectations in terms of providing for the care of Sabrina as I have mentioned nor for Bradley, who at the time that she swore her trial affidavit was residing in country town B and undertaking a small amount of part-time work.
188Nothing is known of Bradley’s financial circumstances which would enable me to determine the extent of any commitment that the wife has to maintain him albeit that he may to some degree remain dependant upon her.

The eligibility of either party for a pension, allowance or benefit under:

(i) any law of the Commonwealth, of a State or Territory or of another country; or

(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

and the rate of any such pension, allowance or benefit being paid to either party

189As I have indicated the wife is in receipt of Centrelink benefits and spousal maintenance. She has no superannuation entitlements.
190The husband estimates his superannuation entitlements at $4,000.
191Whether the wife will continue to receive a government benefit will depend upon her eligibility both as to entitlement and the nature of the benefit following settlement.
192I propose in any event to continue the spousal maintenance payment until the first payment of her capital entitlement pursuant to my orders.

Where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable

193The parties throughout their relationship and marriage lived modestly.
194Whilst the wife concludes in her trial affidavit that her standard of living has diminished, there is little evidence in support of that and, subject to the orders that I propose to make, her standard of living would be enhanced from that which she has had immediately post-separation.

Conclusion

195The parties have had a relationship over a period of 16 years.
196Ultimately the earning capacity of each of the parties has been affected by factors relating to their age and health.
197As a consequence of the orders I propose to make the husband will have significant borrowings that he will have to meet.
198Given his application at trial and the proposed payment to the wife, quite clearly he contemplated an ability to be able to obtain and service a borrowing of $450,000.
199The husband’s capital position however will always be significantly superior to that of the wife, although the reality for the husband is that he is highly unlikely to ever realise that capital in the event that he is able to meet to obligations placed upon him by my orders.
200On balance I am satisfied that there should be a modest adjustment in favour of the wife.
201My finding on contribution would entitle the wife to a settlement of $495,116 of which the wife has already received $64,000.
202An adjustment of 7 per cent would entitle the wife to $668,406 of which she has already received $64,000 giving her a net entitlement of $604,179 which I round up to $605,000.
203I am satisfied that an adjustment to the extent of 7 per cent is warranted having regard to the factors that I have identified as being relevant to the circumstances of the parties.

Just and equitable

204I have determined that the wife’s entitlement on the contribution basis is 20 per cent of the net pool of assets with an adjustment of 7 per cent to take into account the factors I have found relevant pursuant to s 75(2) of the Act.
205The husband will as a consequence of my orders have to pay to the wife $605,000.
206I propose to order that the payment of that sum be staged over three payments over a period of some twenty four months, with spousal maintenance to continue until the first payment and for the payments to be interest free thereafter.
207Whilst the wife has been found by me to have a present entitlement to 27 per cent of the parties’ assets, as I have observed, it is unlikely that the husband will realise the capital comprised in the farming lands that he holds. He will continue to have a modest income in all probability and will be stretched to service debt, particularly the debt that will be imposed upon him by virtue of my orders.
208In the event that a sale of any portion of the land is necessary to effect the sale of any of the farming land to effect the property settlement such sale is likely to attract a capital gains tax liability. That liability should be factored into the calculation of the amount that the wife receives by substituting for the asset disposed of that sale figure net of sale expenses and capital gains tax liability into the schedule of assets and liabilities I have found to exist in the determination of this matter.
209I am not satisfied that to achieve a just and equitable outcome requires any adjustment to be made to the percentage outcomes I have found and, further that a just and equitable outcome does require the husband to have the opportunity of retaining the farming property.
210I will now hear counsel as to the form of the orders in relation to CGT
211For these reasons I propose the following orders:

Proposed Orders

1.The Applicant husband OLIVER ERNEST HOLMES do pay or cause to be paid to the Respondent wife MARTHA CHRISTINE HOLMES the sum of $605,000 (six hundred and five thousand dollars) in the following manner:
(a)as to $300,000 thereof within 90 days of these orders;
(b)as to a further $150,000 thereof by 30 June 2013; and
(c)as to the balance of $155,000 by 30 June 2014.

2.Contemporaneously with the first payment to the wife she shall, at her cost, cause Caveat [K] to be withdrawn, provided however that she shall be at liberty to further caveat the husband’s land holdings to secure the balance due to her, following each instalment payment, if she is so advised.
3.Paragraph 1 of the orders made on 16 December 2009 be discharged with effect from the date of the first instalment payment to the wife as ordered in paragraph 1 herein.
4.Save and except as may be ordered by way of enforcement or as otherwise provided for herein, the parties shall henceforth hold the property, both real and personal, of which they presently respectively stand possessed as their sole property free of claim by the other.
5.The husband shall be at liberty to accelerate the payments to the wife ordered herein without penalty or discount.
6.All outstanding applications otherwise be and are hereby dismissed.

I certify that the preceding [211] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate