Jillett and Jillett - [2018] FamCA 913

FAMILY COURT OF AUSTRALIA

JILLETT & JILLETT

[2018] FamCA 913

FAMILY LAW – PROPERTY – Where long marriage – Where both parties introduced significant assets into the relationship both at cohabitation and thereafter – Where the husband’s assets comprise significant working rural properties – Where husband received a significant asset by way of his parents “succession planning” – Where husband asserts debt obligations arising from such arrangements – Where not appropriate to include such uncertain obligations in the pool for adjustment – Where parties’ contributions overall found to be equal – Where no further adjustment called for.

Family Law Act 1975 (Cth) ss 75, 79
Limitation Act 1969 (NSW) s 54

Bevan & Bevan [2014] FamCAFC 19
Blair v Nugent (1846) 3 Jo & Lat 658
Chapman & Chapman [2014] FamCAFC 91
Dickons & Dickons [2012] FamCAFC 154
Giacci v Giacci Holdings Pty Ltd [2010] WASCA 233
Hipworth v Mahar (1957) CLR 335
Pandelis & Pandelis [2018] FamCAFC 66
Rodgers & Rodgers (No 2) [2016] FamCAFC 104
Russell & Russell (1999) FLC 92-877
Scott & Danton [2014] FamCAFC 203
Stage Club Ltd v Millers Hotels Pty Ltd [1981] HCA 71
Stanford v Stanford [2012] HCA 52
Teal & Teal [2010] FamCAFC 120

APPLICANT:

Ms Jillett

RESPONDENT:

Mr Jillett

FILE NUMBER:

DUC

356

2015

DATE DELIVERED:

9 November 2018

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

28 and 30 August 2017 and 17 September 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Sansom SC

SOLICITOR FOR THE APPLICANT:

Campbell Paton & Taylor

COUNSEL FOR THE RESPONDENT:

Mr Millar

SOLICITOR FOR THE RESPONDENT:

Farrar Gesini Dunn

Orders

That the husband pay to the wife the sum of $321,337.50 within three months from the date of these orders.
That a base amount of $140,000.00 is allocated to the wife out of the husband’s interest in the B Super Fund (“the fund”) Member No ...
That in accordance with section 90MT(1)(a) of the Family Law Act 1975:
(a)The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount referred to in the above; and
(b)The husband’s entitlement (and the entitlement of such other person to whom splittable payments may be made) to payments out of the husband’s interest in the Fund is correspondingly reduced.
That the trustee of the B Super Fund shall do all acts and things and sign all such documents as may be necessary to:
(a)Calculate in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement of the wife created by order 2 of these orders; and
(b)Pay the entitlement whenever the trustee makes a splittable payment out of the husband’s interest in the Fund.
That Order (2) have effect from the operative time and the operative time is four business days from the date of service of sealed orders on the trustee and the trustee shall be at liberty to apply to the Court in relation to these orders within that four day period.
That a base amount of $68,000.00 is allocated to the wife out of the husband’s interest in C Super (“the second fund”) Member No ...
That in accordance with section 90MT(1)(a) of the Family Law Act 1975:
(a)The wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount referred to in the above; and
(b)The husband’s entitlement (and the entitlement of such other person to whom splittable payments may be made) to payments out of the husband’s interest in the Second Fund is correspondingly reduced.
That the trustee of the C Super shall do all acts and things and sign all such documents as may be necessary to:
(a)Calculate in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement of the Wife created by order 2 of these orders; and
(b)Pay the entitlement whenever the trustee makes a splittable payment out of the Husband’s interest in the said fund.
That Order (6) have effect from the operative time and the operative time is four business days from the date of service of sealed orders on the trustee and the trustee shall be at liberty to apply to the Court in relation to these orders within that four day period.
That the parties have liberty to apply as to implementation or enforcement of these orders.

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 Jillett & Jillett 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 PARRAMATTA

FILE NUMBER: DUC 356 of 2015

Ms Jillett

Applicant

And

Mr Jillett

Respondent

REASONS FOR JUDGMENT

These are proceedings for property settlement as between the applicant wife and respondent husband commenced by the wife in the Federal Circuit Court of Australia at D Town in October 2015.
In her Initiating Application the wife sought an order somewhat inelegantly that “by way of property settlement, the wife be entitled to 65 per cent of the matrimonial assets as determined by the Court”.
The husband in his Response filed in December 2015 relevantly sought an order that provided “that the husband and wife be entitled to be the sole legal and beneficial owners of all items of property including real estate, savings, motor vehicles, partnership interests, insurances, shares, equities, superannuation entitlements and personal effects currently in the possession or control of each of them respectively”. In summary, he sought no order adjusting the then present property entitlements of the parties.

Litigation History

Regrettably the proceedings, having been listed for final hearing for three days in early April 2017 in the Federal Circuit Court in D Town, were transferred on the first day of trial in the Federal Circuit Court to this Court.
Proceedings were first before a Registrar of this Court on 24 July 2017 and were subsequently listed for final hearing commencing 28 August 2017. The hearing continued on 30 August 2017 on which date, as a consequence of valuation issues, proceedings were adjourned part heard to 14 November 2017.
After proceedings were adjourned part heard, further issues arose between the parties in relation to capital gains tax issues likely to arise as a consequence of final orders. On 2 November 2017 the parties, by consent, appointed a single expert as to the capital gains tax issue and the date for further hearing was vacated.
The parties subsequently remained at issue in relation to the letter of instructions to be provided to the agreed single expert as to the capital gains tax issue and as to whether questions should be permitted to be administered to the single expert property valuer. Orders as to these issues were made on 20 November 2017 and 20 February 2018.
Subsequently, the husband appointed a shadow expert as to real estate valuations and on 9 April 2018 orders were made providing for the appointed single expert and the husband shadow expert to confer as to real estate valuation issues. Thereafter on 10 May 2018 orders were made providing for a joint statement of the experts as to rural property valuations to be filed within seven days and, otherwise, for single expert valuations of properties at E Town and F Town to be filed within seven days.
Subsequently, a further two days for trial were allocated and the matter proceeded on a part heard basis for final hearing on 17 September 2018. The matter was concluded on that day and judgment was reserved.

Trial Documents

At trial the applicant wife relied upon the following:
a)her trial affidavit filed 13 March 2017;
b)her updating trial affidavit filed 21 August 2017;
c)her further updated Financial Statement filed 21 August 2017.
The husband at trial relied upon the following:
a)his trial affidavit filed 28 February 2017;
b)his updating trial affidavit filed 8 December 2017;
c)the affidavit of Mr G Jillett, the husband’s father filed 28 February 2017;
d)the affidavits of Mr H, accountant filed 10 March 2017 and 28 August 2017.

Background

The wife is presently aged 61 and the husband aged 60.
The parties married in 1991. The parties did not cohabit prior to marriage.
There are three children of the parties’ marriage now aged 24, 22 and 20.
The parties finally separated in late January 2014 when the wife moved out of their then residence, the rural property “Property J” near K Town, New South Wales about 350 kilometres west of Sydney. Following separation the husband remained in occupation of the property.
At the time of commencement of cohabitation the wife was in full-time employment as a public servant. She resigned her full-time position shortly before marriage. The husband was a farmer working in his family partnership business at K Town.
At the commencement of cohabitation the parties’ assets comprised:
a)the wife’s home unit property at Suburb N in Sydney. This property was purchased by her in September 1985 for $70,500.00. The purchase price was funded by monies totalling $75,000.00 lent to the wife by her mother. The wife repaid the debt to her mother in 1996 interest free. This home unit property was sold in January 2004 for $570,000.00;
b)the wife’s savings of about $13,000.00;
c)the wife’s motor vehicle 1 purchased shortly before marriage for $27,000.00 with the purchase price comprising the wife’s trading of $9,000.00, monies gifted to her by her mother of $9,000.00 and the balance of $9,000.00 from a compensation verdict received by the husband;
d)the wife’s public company shareholdings;
e)the wife’s furniture, furnishings and personal effects;
f)the husband’s motor vehicle 2;
g)the husband’s rural property comprising 500 acres at K Town known as “Property J South” that was acquired by the husband in 1986 for the sum of $135,000.00 and unencumbered;
h)the husband’s 25 per cent interest in the “Mr G Jillett” rural partnership operated by his family members being himself, his brother Mr L and his parents Mr G and Ms M. Whilst the trading circumstances of the partnership varied from season to season as at June 1991 the husband’s interest comprised his Capital Account of $18,863.00 plus a debt owed to him by the partnership of $86,810.00.
During cohabitation the wife, having resigned her full-time teaching position at the time of marriage, was able to obtain work at various times in a casual position. Otherwise, she provided primary care for the children of the relationship and worked on the parties’ rural property.
At the time of trial the wife continued in her work when required. There is no evidence that she had sought full time or indeed permanent part time work. She is paid on average about $430.00 per day.
The husband throughout the cohabitation thereafter has continued his work as a farmer in his family rural partnership “Mr G Jillett” and undertook off farm contract work. In the early years of the relationship the husband undertook some part-time work. His income was otherwise derived from his partnership drawings. The partnership paid for the parties’ home utilities including electricity, phone, fuel, car maintenance and registration, insurances mostly claimed as expenses of the partnership and some such as private health insurance expenses being debited against the husband’s partnership capital account. In some years funds were deposited into the husband’s Farm Management Deposit Account and in others funds withdrawn from that account.
The husband’s Farm Management Deposit Account had a balance of $260,000.00 as at February 2017 when he swore his initial trial affidavit. Arrangements for such accounts provide for farmers to be able to deposit funds from farm income into such account with the income so deposited not being assessable for income tax provided that funds deposited are not withdrawn within 12 months. This arrangement allows farmers to even out their income circumstances to allow for less profitable years during which they can access funds in their Farm Management Deposit Account with any withdrawals being assessable for income tax in the financial year that the funds are withdrawn. As at August 2017 his Farm Management Deposit balance had been reduced to $200,000.00. A withdrawal of his Farm Management Deposit to fund any payment to the wife would incur additional personal income tax of about $66,000.00.
During cohabitation – the wife
Subsequent to the marriage the parties commenced to reside at “Property J”. The parties undertook various renovations and improvements to the property. She, otherwise, funded from capital funds available to her various holidays including overseas holidays for she and the husband and, otherwise, for the family as a whole. Otherwise, the wife undertook various tasks in relation to the farming partnership and its activities.
In August 1996 the wife’s father passed away. The wife inherited from his estate $461,919.00. The wife applied those funds as follows:
a)to the purchase of a home unit property at E Town for the sum of $230,000.00. This property was tenanted and in addition to the Suburb N property provided the wife with rental income from 1997 onwards;
b)in repayment to her mother of the $75,000.00 advanced to the wife for the purchase of the Suburb N property;
c)an investment of $100,000.00 in an Company C investment portfolio;
d)the investment of $25,000.00 on term deposit. These funds were subsequently expended on an overseas holiday for the parties and later on the purchase of a motor vehicle for the wife in 2010;
e)the purchase of a motor vehicle 2 for $15,900.00.
In September 2005 the wife’s aunt passed away and the wife inherited $145,000.00 from her estate. These funds together with $50,000.00 from her Company C investment portfolio were applied in prepaying school fees in the sum of $194,000.00 for the children’s continuing tuition and boarding fees. The prepayment of such fees provided a significant saving of about $100,000.00 in relation to such fees. The maternal grandmother also provided $4,000.00 per child per year towards the children’s private school fees in the period from 2007 to 2013.
In 2014 at about the time of separation the wife sold her Suburb N home unit property for $570,000.00 and purchased a property at O Street, K Town for $262,000.00 plus stamp duty and legal costs. At the date of trial the wife resides in this cottage property. Otherwise, from the proceeds of sale of Suburb N the wife purchased a motor vehicle for her son, travelled to Europe with her son and expended some $30,000.00 on improvements to her K Town cottage. From her funds she has also provided ongoing financial assistance to the children.
Otherwise, the wife’s income from employment during cohabitation was supplemented by dividends received by her, interest on invested funds, trust distributions and capital gains derived from share trading. Her income over the period from 1991 to 2014 averaged about $95,000.00 per annum with her income being applied to the marriage and household and living expenses. The wife asserts that her income as compared to the partnership drawings and/or income of the husband paid for the majority of living and household expenses for the family during cohabitation with the husband’s income from the partnership being minimal and being supplemented by drawings as against his capital account in the partnership. The husband’s assertions as to his income demonstrate that the wife’s financial contributions through income and otherwise exceeded his.
The wife’s mother passed away in March 2016. She has received various distributions from the estate and in all a total of $1,754,160.00 was deposited to her ANZ account. She has applied these funds primarily as follows:
a)$166,947.00 in payout of the mortgage secured over her F Town property;
b)$250,000.00 to an Company C Term Deposit;
c)$540,000.00 by way of a non-concessional superannuation contribution;
d)$124,140.00 invested in a P Super investment;
e)The purchase and trading of public company shares;
f)About $573,000.00 remains in her ANZ account.
The wife continues to work with her modest income from that source supplemented by her rental and investment income.
During cohabitation and after – the husband
In 2004 the husband and his brother purchased property comprising 1,325 acres known as “Property Q” for $1,250,200.00 plus purchase costs making a total of $1,320,628.00. The husband’s family partnership provided the purchase price by way of two loans from the Commonwealth Bank and on lent the borrowed funds to the husband and his brother. One of the loans was paid out by 2012. In consideration of the partnership operating on the property the partnership had met and still does meet interest payments on the loan. The husband and his brother over the years have reduced the capital outstanding on the loan from their respective incomes.
As at 30 June 2013 the outstanding debt to the CBA was $805,229.00. As at January 2017 the outstanding loan was $593,399.00.
In addition to the partnership undertaking farming activities on the properties “Property J” and “South Property J” owned by the husband, it also undertakes farming activities on three properties owned by the husband’s brother.
In 2006 by Deed of Agreement dated 1 September 2006 as between the husband, his brother and his parents, the husband and his parents, relevantly, agreed:
a)that the parents’ property “Property J” having a value of $1.46 million be transferred to the husband;
b)that the sum of $250,000.00 be secured by the husband in favour of his parents by way of a second mortgage secured over the property with the debt repayable on six months written notice of demand after the fifth anniversary of the date of death of the survivor of the husband’s parents by the legal personal representative of that surviving parent with interest computed from the date of death of the surviving parent at a prescribed rate payable six monthly in arrears. It was, otherwise, provided that in the event of the husband reducing his mortgage debt to his parents then any payments in reduction of that debt will be divided by the husband’s parents equally amongst their daughters;
c)that $847,000.00 be the subject of a separate deed of agreement (referred to below);
d)that the sum of $363,000.00 be a gift to the husband in consideration of a natural love and affection.
As at the date of this agreement the husband’s parents were residing in the township of K Town. The agreement, otherwise, provided that should the husband’s parents be unable to adequately care for themselves, then in such event the husband and his brother shall jointly be responsible for obtaining at their expense alternate accommodation and residential care suitable for their parents and in the event that the husband and his brother purchased retirement village accommodation for their parents then such property would remain the property of the husband and his brother in equal shares.
By a Second Deed of Agreement dated 1 September 2006 (Exh “K”) between the husband and his parents, the rural property “Property J” be transferred to the husband by his parents, otherwise, the Deed relevantly provided that the husband acknowledged that he was indebted to his parents for $847,000.00 in consideration of the transfer of the property to him with such debt repayable on 60 days’ notice, to accrue no interest and to be released upon the death of the survivor of his parents. No demand has been made for repayment.

This arrangement the husband described was to protect his parents in an “unknown future”. They are both now 85 years of age. His father describes the loan arrangement as “my superannuation guarantee”.
A similar arrangement was entered into by the husband’s parents with their other son. The amount involved was about $700,000.00. No demand has been made for repayment.
The loan arrangements were entered into so that the family rural operations could continue.
The husband’s father asserts that the only circumstance that would give rise to a call for repayment would be if the properties were sold before his death and he and his wife might be left with nothing. In the 2017 financial year the parents had drawings of $33,000.00 from the partnership with other medical related expenses paid of about $10,000.00. Otherwise, the partnership trading accounts for the 2017 year reveal that the husband’s parents have a capital account in the partnership of about $521,000.00 including a farm management deposit of $50,000.00. They reside in the township of K Town. There is no suggestion that the trading partnership will not continue into the foreseeable future with the parents still entitled to their partnership income or drawings from their capital account from time to time. As at 30 June 2017 their capital account was $521,438.00 substantially reflecting retained profits undrawn from the previous financial year of $349,513.00.
In September 2006 the parties to the trading partnership amended their partnership agreement so that it provided for a one third interest in the partnership for the husband, a one third interest in the partnership for his brother and a one third interest in the partnership for his parents jointly.
The husband asserts a familial attachment to the rural properties “Property J” and “Property J South”, they having originally been owned by his grandfather.
On 5 April 2012 the husband and his parents signed a Deed of Release that provided that in consideration of natural love and affection the parents released the husband from the $250,000.00 owing by the husband to his parents pursuant to the earlier deed referred to above. The effect of this Deed of Release was to end the expectancy of the husband’s sisters in relation to any capital payments made in reduction of this outstanding debt or indeed the debt itself if it was ultimately called up no earlier than five years after the death of the last surviving parent of the husband.
Concurrently with the Deed of Release, the husband’s parents executed Wills dated 5 April 2012 whereby on the death of the survivor of them the husband and his brother were to acquire the surviving parent’s interest in the trading partnership subject to a charge on that partnership interest so as to provide a legacy of $50,000.00 to each of their five sisters such payments to be paid by five equal annual instalments of $10,000.00. Of course, it is trite to say that a Will is a living document and may be changed at any time until the testator’s death. However, the arrangements proscribed in the Wills clearly seem to be in substitution for the sisters’ prospective interests under the first Deed of Agreement dated 1 September 2006. The husband’s parents signed new Wills on 27 February 2017 clearing up any misunderstanding as to the obligations of the husband and his brother with the new Wills providing that each of the husband and his brother are charged with the obligation to pay $50,000.00 to each of their sisters. That is a total of $250,000.00 each with those payments to be made by instalments of $10,000.00 per annum. However, such obligation does not arise until the death of the last surviving parent.
The husband’s parents are both presently aged 85.
A significant issue at trial was the way in which to treat the husband’s “debt” to his parents and his indeterminate in time periodic liability to his sisters on the death of his surviving parent arising from his parents Wills.
In Rodgers & Rodgers (No 2) [2016] FamCAFC 104, the Full Court said;
37.In Biltoft and Biltoft, the Full Court recognised the “general rule” and its longstanding applicability and referred to the “well recognised exceptions” to which we have earlier referred in quoting from Dr Dickey. The Court recognised, in addition, that the general rule “is not absolute” and “is not prescribed by statute” and that the circumstances of the particular case can permissibly lead to the conclusion that “the trial judge was not obliged … to determine the quantum of [the relevant] debt and thus the net value of the property of the parties”.[1]
38.In Chorn and Hopkins, the Full Court recognised that a decision as to whether “both parties should bear responsibility” for taxation debts of one party to the marriage was to be decided by reference to what was just and equitable.
39.In Noetel and Quealey, (a case dealing with potential capital gains tax) the husband had, on advice, deliberately not declared dividends in a company controlled by him (in lieu receiving a salary). Tax would be payable when a dividend was declared but it could not be predicted when that would be, the evidence only going so far as to say that it would happen “at some point”. The Full Court held:
We are satisfied that the course adopted by the trial Judge of disregarding the potential future tax liability of the husband was open to his Honour in the circumstances of this case particularly as there was no certainty such tax would be incurred by the husband withdrawing funds by way of dividend ... The trial Judge was, on the evidence before him, entitled to accept the submissions made on behalf of the wife that this potential or contingent liability of the husband should be disregarded as a liability for the purposes of establishing the pool of assets to be divided between the parties…[2]
It is in our view important to reiterate and emphasise what was said in Biltoft above: there is no statutory prescription which suggests that any such treatment of the liability is mandatory. Despite the frequency with which the “rule” is applied we have not been taken to any authority, nor are we aware of any authority, which suggests that any such “rule” has the effect of a binding rule of law. What emerges from the authorities is that while there might be a “rule” the application of which is appropriate in the vast majority of cases, the manner in which a particular liability should be treated is, ultimately, dependent upon the nature of the liability, the circumstances surrounding the liability and the dictates of justice and equity shaped by each.
The usual practice or “rule” sits comfortably and conformably within that rubric – in many cases, perhaps almost all, liabilities will be deducted from the “gross” value of the property because it will be clear (and even if not expressly stated, determined) that the justice and equity of the case demands that the liabilities should be met by the parties in the proportions in which the court determines the property is to be divided. Liabilities that are vague, uncertain, unlikely to be enforced and the like might be treated differently because those circumstances might, in the circumstances of the particular case, render it unjust and inequitable for liabilities to be deducted in that manner. Those so-called “exceptional cases” are but instances of the broader consideration of the justice and equity of the particular case. (Footnotes omitted)….
…49. It should be accepted, as the Court in Campbell points out in the passage quoted earlier, that dealing with a liability by reference to s 79(4)(e) has the potential to effect injustice. Equally however, requiring the wife here to share in a liability calculated in an amount certain (which is the effect of deducting it in the manner contended for by the husband) when no such liability is incurred immediately in any calculated sum, nor will be in any such sum, also creates the significant potential for injustice to the wife. As Nygh J once remarked, “a debt due does not diminish the property of the parties until it is paid or execution is levied”.
[1] Biltoft (above), at 82-129.
[2] Noetel (above), at [122].
In the circumstances of this matter, it would not be appropriate to include these “liabilities” in the asset pool with the effect that the wife would, therefore, bear some liability. The parents do not assert any impecuniosity that would cause a demand to be made, indeed, they are, it appears, in a most sound financial position having regard to their advanced age. The husband asserts no intention to end his rural activities in the foreseeable future leading to an expectation that his parents will continue to be entitled to their profits and other entitlements from the trading partnership.
Overall, it is considered remote that there would be any call on the debt. To include, it would in effect require the wife to contribute by reason of the diminution of the pool. Such is not just or equitable by reason of the very uncertainty that attaches to the asserted liability. It will be omitted from the pool for consideration.
During cohabitation the husband paid various expenses towards the children’s school fees and incidentals over a period of about 11 years to June 2015 averaging about $11,000.00 per year.
Subsequent to separation and in 2014, the husband paid various monies totalling about $55,000.00 for school fees or, otherwise, to assist the children of the marriage. He made lesser payments in 2015 and 2016. Otherwise, since separation he has made drawings as against his partnership capital account for the payment of his legal fees, accountant’s fees and single expert fees totalling about $250,000.00. This has been a significant reason why the partnership trading loan increased from about $242,000.00 in June 2016 to about $650,000.00 in June 2017. The drawings by the husband saw his capital account fall from a credit of about $154,000.00 in June 2016 to a debt to the partnership of about $52,000.00 in June 2017.
By June 2017 the loan due to the partnership by the husband and his brother had been reduced to about $593,000.00. Interest on the loan was serviced by the trading partnership in consideration of the use of the subject property. There had been no independent assessment of market value rent.
Otherwise, the husband asserts very modest contributions to the wife’s property holdings.
The husband asserts that for the most part he is in good health although he suffers some lower back difficulty. He expects that he may not continue to work as a farmer for much more than seven years.
The husband has concerns that in the event of a capital payment being payable to the wife by way of property adjustment that he is able, if possible, to maintain the integrity of the rural properties on which the trading partnership operates.

Property Adjustment

At trial both parties clarified the property adjustment orders sought by them.
The wife sought an order that she be paid the sum of $1,896,580.00 and in default of that sum being paid to her by the husband within three months or such other period as the Court determines, then there be an order for the sale of the rural property “Property J” so as to realise her entitlement. The wife has no objection to part of her entitlement being received by way of a superannuation split from the husband’s superannuation entitlements.
The husband for his part sought an adjusting order in that the wife pay to him the sum of $104,823.00 with liberty to apply as to enforcement of such an order.
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here at trial the wife seeks an order for adjustment of property by way of cash adjustment as does the husband.
Otherwise, a consideration of s 79(4) factors as discussed below reveals it would be unjust or unfair to leave the parties’ property rights as they are.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.

The asset pool

The parties provided an updated draft balance sheet towards the end of the trial (Exh “O”). Subsequently, that pool was also addressed in submissions.
The draft asset pool representing the parties’ present assets and liabilities comprised items as below. Matters of agreement are noted.
Assets:
Wife          O Street, K Town  $   280,000.00    Agreed
Wife          R Street, E Town  $   815,000.00    Agreed
Wife          S Street, F Town  $   435,000.00    Agreed
Wife          ANZ Online Saver  $   694,668.00    Agreed
Wife          ANZ V2 Plus  $     29,117.00    Agreed
Wife          ANZ Cheque  $      1,149.00    Agreed
Wife          Company C Term Deposit  $   250,000.00    Agreed
Wife          Count Online Share Portfolio                   $   210,000.00    Agreed
Wife          V-Accounts  $   122,628.00    Agreed
Wife          Company T Cash Management                  $     32,531.00    Agreed
Wife          4WD  $     18,500.00    Agreed
Wife          Motor vehicle 3  $     45,000.00    See below
Wife          Household contents  $      8,000.00    Agreed
Wife          Jewellery  $      3,000.00    Agreed
Wife          Final distribution  $     82,715.00    Agreed
Husband     “Property J” K Town
(202.2 hectares)  $ 1,510,000.00   See below
Husband     “Property J South” K Town
(473.86 hectares)  $ 2,040,000.00   See below
Husband     “Property Q Road” K Town  $   675,000.00    See below
Husband     Telstra Two shares (400)  $      1,660.00    Agreed
Husband     Company C Flexible Lifetime Investment                 $        9,152.00         Agreed
Husband     Company C Shares (2,950)  $     15,015.00    Agreed
Husband     Company B Investment  $      7,327.00    Agreed
Husband     Farm Management Account  $   200,000.00    Agreed
Husband     Company C Death Benefit Policy             $     23,574.00    Agreed
Husband     Company U Life Policy  $      9,163.00    Agreed
Husband     33 per cent interest Mr G Jillett
Partnership  $   441,048.00    See below
Husband     ANZ Access Cheque  $      4,849.00    Agreed
Husband     Company W account  $          249.00    Agreed
$ 8,105,177.00
Superannuation:

Wife          B Super  $     85,000.00
Wife          V Personal Super  $   532,700.00
Husband     Company C Super  $     68,252.00
Husband     B Super  $   140,142.00
$   826,094.00
$ 8,931,271.00

Liabilities:

Wife          ANZ MasterCard  $      3,203.00    Agreed
Husband     Legacy obligation to sisters  $   250,000.00    See below
Husband     Company X Water loans:
“Property J” Loan  $     24,522.00    See below       “Property Q” loan 50 per cent  $      5,901.00    See below

Husband     Est Tax on Company Y account withdrawal                $        65,829.00       See below
Husband     50 per cent Debt to Partnership
“Property Q”  $   296,700.00    See below

Husband         Visa card  $      1,291.00       Agreed
Husband     Debt to parents “Property J”  $   847,000.00    See below
It was, otherwise, contended by the wife that the husband’s prospective inheritance from the estate of his last surviving parent of that parent’s interest in the trading partnership should be brought to account as a financial resource of the husband. His parents’ Wills referred to above provide for him and his brother to receive their parents’ one third interest in the partnership.   Yet this is simply an expectancy, indeterminate in time, indeterminate as to value at that indeterminate time, subject to the exigencies of rural circumstances, subject to any new testamentary disposition by his parents or either of them and to any intervening dealing by his parents with their partnership interest. In such circumstances it will not be considered a financial resource such that it is brought into consideration.

The value of the wife’s Motor vehicle 3 was in issue. There was no valuation evidence and so the value attributed to the car by the wife in her Financial Statement is adopted.
The value of “Property Q” above reflects to initial valuation of the property as a whole. The property was subject to a valuation at $1.35 million. The husband has a 50 per cent interest with a value of $675,000.
The husband’s interest in the “Property Q” property has a prospective capital gains tax liability that is estimated to be about $45,000.00. He has no plans to sell the property in the foreseeable future. This prospective liability will be ignored.
The husband’s interest in the “Property Q” property is in reality subject to his obligation to meet one half of the capital debt remaining (to the partnership) that related to the purchase of the property, his half at the time of trial being about $296,700.00. This figure will replace the book entry figure used by the husband’s accountant that was simply the original loan figure without regard to the substantial reduction in the debt by reason of payments by the husband and his brother.
The properties “Property J” and “Property J South" were valued as a whole at a figure per hectare. That consolidated value has been apportioned to each property on a pro rata basis to establish individual values so as to be able to reflect the disparate contributions to the acquisition of each.
The value of the husband’s 33 per cent interest in the Mr G Jillett partnership was a matter of contention. The wife correctly submitted that there should be some disquiet as to the evidence of the husband’s accountant on the issue. His evidence was unconvincing and failed to address the reality of arrangements between the parties to the partnership particularly as to the “Property Q” loan and Company X water debts. His evidence simply did not assist in determining the present real value of the husband’s partnership interest.
The evidence of the husband’s accountant provided a “market value” balance sheet of the trading partnership as at June 2017. He included in the assets the whole of the original loans advanced to the husband and his brother for the purchase of “Property Q” in the sum of $1,320,628.00 notwithstanding that the loans had been paid down to about $503,400.00 by that date. The partnership liability to the CBA for the remaining borrowing was included at $593,400.00. The actual remaining debt owed by the husband and his brother of $593,400.00 should replace the sum of $1,320,628.00.

The value of the husband’s partnership interest varies from year to year being much dependent on farming and economic conditions. The wife did not ultimately contend for a value but ultimately in submissions adopted the husband’s “admission against interest” that asserted a value of his partnership interest at $441,000.00. Yet this figure represented the husband’s market value share of partnership funds as at 30 June 2017 without adjustment for the debt discussed above. The market value as against book value is as a result of increased livestock and a revalue of plant and equipment. An adjustment for the true value of the husband and his brother’s liability to the partnership would reduce the net asset value of the partnership accordingly by $727,228.00 down to $1,443,047.00. Assuming that the partners’ funds are pro rata reduced accordingly the husband’s partnership funds as at June 2017 at market value would be about $296,000.00. Yet the sum owed by the husband to the partnership as his share of the present value of the debt for “Property Q” in the sum of $296,700.00 must be included as a liability of the husband in the asset pool for division.
The husband’s present obligation by way of legacy to his sisters is indeterminate as to time as discussed above. The obligation arises under his parents’ Wills that may be changed at any time before death, and as presently drafted will not arise until the death of the last surviving parent. Otherwise, the “legacy” is payable by instalments. No evidence was adduced to endeavour to establish the present value of such a contingent liability. Yet the “consideration” for the payments is the husband and his brother acquiring their parents’ interest in the trading partnership. So there is both a prospective benefit by way of expectancy and a prospective obligation under the parents’ Wills as they presently are. The “expectancy” under the parents’ Wills is to be excluded as discussed above and thus the obligation that relates to same will also be excluded. It is trite to say that a Will is a living document and can be changed or revoked at any time prior to death. By reason of the discussion above as to the Court’s discretion as to such debts this asserted obligation will be omitted from consideration.
The Company X Water loans are primary liabilities of the husband. Yet historically they have been paid as a trading debt of the partnership (Exh “U”) with the consequence that the husband is in effect indemnified against the liability. To include them in the balance sheet would have the effect of the wife assuming some liability, therefore, by reason of the diminution of the net asset pool. That approach is not just and equitable. They will be removed from the balance sheet.
The prospective liability for income tax should the husband withdraw his Company Y deposit to meet any payment ordered to the wife (or indeed should farming circumstances deteriorate such that he would need to access this retained fund) is problematic and uncertain. Again to include it in the balance sheet would have the effect of the wife assuming some liability, therefore, by reason of the diminution of the net asset pool. That approach is not just and equitable. It will be removed from the balance sheet.
The “debt” to the husband’s parents of $847,000.00 will be omitted from the pool for reasons outlined above. It will be considered in the context of s 75(2) factors. However, the effect is to increase the husband’s contribution to the asset pool by the full value of “Property J”.
Otherwise, it was contended on behalf of the wife in submissions on 17 September 2018 that the “debt” was in any event now statute barred by reason of 12 years having elapsed since the date of the Deed. Such a contention ignores the fact that the husband has throughout these proceedings asserted or confirmed on affidavit his “liability” to his parents.
Section 54 of the Limitation Act 1969 (NSW) relevantly provides:
54 Confirmation
(1)Where, after a limitation period fixed by or under this Act for a cause of action commences to run but before the expiration of the limitation period, a person against whom (either solely or with other persons) the cause of action lies confirms the cause of action, the time during which the limitation period runs before the date of the confirmation does not count in the reckoning of the limitation period for an action on the cause of action by a person having the benefit of the confirmation against a person bound by the confirmation.
(2) For the purposes of this section:
(a)a person confirms a cause of action if, but only if, the person:
(i)acknowledges, to a person having (either solely or with other persons) the cause of action, the right or title of the person to whom the acknowledgment is made, or...
(4)An acknowledgment for the purposes of this section must be in writing and signed by the maker." that if a cause of action is confirmed “before the expiration of the limitation period” the limitation period will restart from the date of the confirmation.
Stage Club Ltd v Millers Hotels Pty Ltd [1981] HCA 71; (1981) 150 CLR 535 at 569-570 Brennan J said, in order to extend the limitation period pursuant to s 54, the confirmation of the cause of action must be made prior to the expiry of the period. An acknowledgment prior to the expiry of the limitation period, if made in conformity with s 54, extends the limitation period, no revival of the cause of action is possible after the period expires.
In Hipworth v Mahar (1957) CLR 335 the Court dealt with an appeal from a judgment of the Supreme Court of Victoria in which the trial Judge had found that the limitations defence raised by the debtor failed because of an acknowledgment in writing made by the debtor. On appeal, counsel for the appellant asserted that while the appellant had made an acknowledgment in writing, it was not an acknowledgment “given to the person entitled thereto or his agent” as required by similar Victorian legislation. The High Court dismissed the appeal. Dixon CJ, Webb and Fullagar JJ, cited the English authority of Blair v Nugent (1846) 3 Jo & Lat 658 at 677, where the Lord Chancellor Sir Edward Sudgeon said:
The next question is whether it is an acknowledgment 'to the person entitled thereto or his agent'. The cases show that the Court has not, in that respect, restricted itself within narrow limits. If it be made in a schedule, affidavit or answer, it is sufficient, although it may be said that in these cases it is made to the Court and not to the party. The decisions are, I think, right. They proceed upon a liberal, but yet a just and fair, construction of the statute.
Giacci v Giacci Holdings Pty Ltd [2010] WASCA 233 Newnes JA summarised some of the relevant principles at [36] - [39] as follows:
[36]The relevant principles can be stated quite shortly. In order to take a debt out of the operation of s 38 of the Act, it is necessary that there be a promise by the debtor to pay the debt. A promise need not be express and a promise to pay will be implied from an unconditional acknowledgment of the debt... In order to constitute such an acknowledgment there must, upon the fair construction of the words read in the light of the surrounding circumstances, be an admission that the debt is owed...But it is not necessary that the acknowledgment specify the precise amount of the debt so long as it is ascertainable from extrinsic evidence... Nor need the acknowledgment be contained in a single document but a number of documents can be combined to make up an acknowledgement...
[37]A promise to pay or acknowledgement of debt must be made to the creditor or the creditor's agent...Such a promise or acknowledgment need not be made direct to the creditor or the creditor's agent but it is sufficient that the debtor intends that it be communicated to the creditor or the creditor's agent as an admission of the debt...
[38] …
[39]Ultimately, what amounts to an acknowledgment is a question of construction in each case and previous cases are therefore of little assistance...
The husband’s prospective obligations under the Deed remain. The nature of those obligations has been considered above.

The Final Pool

The ultimate pool of assets for consideration is thus as follows:

Assets:

Wife          O Street, K Town   $     280,000.00
Wife          R Street, E Town   $     815,000.00
Wife          S Street, F Town   $     435,000.00
Wife          ANZ Online Saver   $     694,668.00
Wife          ANZ V2 Plus   $      29,117.00
Wife          ANZ Cheque   $        1,149.00
Wife          Company C Term Deposit   $     250,000.00
Wife          Count Online Share Portfolio                    $     210,000.00
Wife          V-Accounts   $     122,628.00
Wife          Company B Cash Management                   $      32,531.00
Wife          4WD   $      18,500.00
Wife          Motor vehicle 3   $      45,000.00
Wife          Household contents   $        8,000.00
Wife          Jewellery   $        3,000.00
Wife          Final distribution   $      82,715.00
($ 3,027,308.00)

Husband     “Property J” K Town (202.2 hectares)      $ 1,510,000.00
Husband     “Property J South” K Town
(473.86 hectares)   $ 2,040,000.00

Husband     “Property Q” K Town   $     675,000.00
Husband     Telstra two shares (400)   $        1,660.00
Husband     Company C Flexible Lifetime Investment                    $     9,152.00
Husband     Company C Shares (2,950)   $      15,015.00
Husband     Company B Investment   $        7,327.00
Husband     Farm Management Account   $     200,000.00
Husband     Company C Death Benefit Policy              $      23,574.00
Husband     Company U Life Policy   $        9,163.00
Husband     33 per cent interest Mr G Jillett
Partnership   $     296,000.00

Husband     ANZ Access Cheque   $        4,849.00
Husband     Company W account   $            249.00
($ 4,791,989.00)
Total:           $ 7,819,297.00

Superannuation:

Wife          B Super   $      85,000.00
Wife          V Personal Super   $     532,700.00
Husband     Company C Super   $      68,252.00
Husband     B Super   $     140,142.00
Total            $     826,094.00
$ 8,645,391.00

Liabilities:

Wife          ANZ MasterCard   $        3,203.00 Agreed
Husband     50 per cent Debt to Partnership
“Property Q”   $     296,700.00

Husband     Visa card   $        1,291.00 Agreed
$     301,194.00
Net:              $ 8,344,197.00

Overall the asset pool has a value of $8,344,197.

Contributions

In Dickons & Dickons [2012] FamCAFC 154 the Full Court said at [24] and following:
There can be little doubt that the classification of contributions by reference to terms such as “initial contributions”, “contributions during the relationship”, and “post-separation contributions”, can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties’ respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
Doing so is also consistent with the demands of authority that the ultimate assessment of contributions should be made without “...giving over-zealous attention to the ascertainment of the parties’ contributions...” (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 524) and the well-established recognition in the authorities (acknowledged specifically by her Honour in this case) that the process required of the Court by s 79 is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise.
The necessarily imprecise “wide discretion” inherent in what is required by the section is made no more precise or coherent by attributing percentage figures to arbitrary time frames or categorisations of contributions within the relationship. Indeed, we consider that doing so is contrary to the holistic analysis required by the section and, in the usual course of events, should be avoided.
In Pandelis & Pandelis [2018] FamCAFC 66 the Full Court reiterated:
24. We think it important to record that in Zyk and Zyk [1995] FamCA 135; (1995) FLC 92-644, the Full Court said it is somewhat artificial to purport to assign a percentage to a particular category of contributions....
The parties’ assets at cohabitation are considered above. There is no evidence as to value of the parties’ real property at the time of marriage. Noting that the wife shortly after marriage paid out the debt on her home unit from funds received from her late father’s estate, there was not much to differentiate their position at the beginning of their 25 year relationship.
Against a rural background the wife was the primary homemaker and caregiver for the parties’ three children and worked during the relationship as a public servant and on the paternal family properties. She received some investment income during the marriage but in the absence of taxation return evidence it is difficult to attach appropriate weight to such contribution.
The husband worked long and hard in the rural partnership, assisted with the children and in the home when able and undertook off farm work to further assist financially. In this regard a most traditional rural marriage.
There is nothing to differentiate these contributions overall, indeed, as counsel for the wife contended “both parties applied themselves diligently ... over the course of this long marriage. Indeed, putting aside contributions of an initial nature and those received from inheritances and from other family members, the traditional contributions made by the parties from their efforts…would, in all probability, be considered to be equal”.
The relationship history, however, reflects significant inheritances on the wife’s side and significant financial benefits conferred on the husband by his parents.
The wife’s inheritances variously (excluding the repayment of her mother’s loan) comprised $386,000.00 from her father’s estate in 1996 (with about $230,000.00 used to acquire E Town that has a present value of $815,000.00), $145,000.00 from her Aunt’s estate in 2005 and $1.82 million from her late mother’s estate post separation. These totalled about $2.351 million. The wife sold her Suburb N home unit in 2004 for $570,000.00.
The husband acquired the property “Property J” from his parents in 2006 in a “succession planning” arrangement implemented by them. A similar arrangement was entered into with the husband’s brother. The “Property J” property is valued on a broad acre basis at $1,510,000.00.
The broad acre property “Property J South” brought into the marriage by the husband now has a value of $2.04 million. These properties have a present total value of $3.55 million.
Counsel for the wife contended for an overall contribution finding favouring the wife as to 60 per cent and the husband as to 40 per cent. This would create a disparity of 20 per cent between the parties: in money terms about $1.6 million. This would in effect isolate the approximate value of the wife’s post separation inheritance and, otherwise, divide the remaining asset pool equally. Such a contention fails to give appropriate weight to the contributions by the husband and his family to the value of the current pool of assets.
Overall, these factors reveal a significant equality in contributions so far as they are reflected in the current asset pool. Indeed, absent the wife’s post separation inheritance contributions would favour the husband most significantly.
Otherwise, the parties’ other contributions in all their different hues should be regarded as equal, this resulting overall in equality of contributions.
Section 79(4)(e)
The Court is required to consider the matters set out in s 75(2) in so far as they are relevant.
The wife is aged 61 and the husband 60. Both are working. The wife does not assert ill health. The husband asserts that he may not be able to work or his capacity on the land will be diminished after about seven years. There is no objective evidence to support the assertion.
The income, property and financial resources are referred to above. The wife has significant static income from investments and rent. Otherwise, the husband earns the whole of his income from personal exertion in the partnership and, otherwise, his future income is subject to the vagaries of rural enterprise. The wife can continue work.
Both parties have superannuation entitlements as set out above. Neither, it appears, will accrue future significant superannuation from work or employment. Both are approaching retirement age.
Overall, there are no matters that require an adjustment to the entitlements of the parties by reason of contributions.
The Court must be mindful of orders that may impact on the earning capacity of the parties. The husband has expressed concerns as to the form of orders in that they should be framed so as to impact as little as possible on the ongoing economic operation of the partnership activities.

Discussion

The asset pool has a value of $8,344,197.00. Small personal credit card balances years after separation will be ignored, making the overall pool about $8,348,691.00. Thus each party is entitled in money terms to about $4,174,345.50.
The wife at present has assets to the value of $3,645,008.00 as follows:
O Street, K Town  $    280,000.00
R Street, E Town  $    815,000.00
S Street, F Town  $    435,000.00
ANZ Online Saver  $    694,668.00
ANZ V2 Plus  $      29,117.00
ANZ Cheque  $        1,149.00
Company C Term Deposit  $    250,000.00
Count Online Share Portfolio  $    210,000.00
V-Accounts  $    122,628.00
Company B Cash Management  $      32,531.00
4WD  $      18,500.00
Motor vehicle 3  $      45,000.00
Household contents  $        8,000.00
Jewellery  $        3,000.00
Final distribution  $      82,715.00
$ 3,027,308.00
B Super  $      85,000.00
V Personal Super  $    532,700.00
$ 3,645,008.00
This would require her to receive an adjustive payment of about $529,337.50 from the husband.
The husband would retain the following:
“Property J” K Town (202.2 hectares)  $ 1,510,000.00
“Property J South” K Town (473.86 hectares)  $ 2,040,000.00
“Property Q Road” K Town (Half)  $    675,000.00
Telstra two shares (400)  $        1,660.00
Company C Flexible Lifetime Investment  $        9,152.00
Company C Shares (2,950)  $      15,015.00
Company B Investment  $        7,327.00
Farm Management Account  $    200,000.00
Company C Death Benefit Policy  $      23,574.00
Company U Life Policy  $        9,163.00
33 per cent interest Mr G Jillett Partnership  $    296,000.00
ANZ Access Cheque  $        4,849.00
Company W account  $           249.00
$ 4,791,989.00
Company C Super  $      68,252.00
B Super  $    140,142.00
$ 5,000,383.00
less
50 per cent Debt “Property Q”  $   296,700.00
$ 4,703,683.00
Less adjustive payment to wife:  $    529,337.50
$ 4,174,345.50
The husband proposes to fund the payment from sale of his shares, proceeds of his life policy and a superannuation split. This will raise about $208,000.00. The balance of $321,337.50 he suggests may involve a sale of his interest in Property Q to his brother. On sale his brother in part consideration for the transfer would assume the husband’s liability to the partnership of $296,700.00 with the husband entitled to a payment of about $604,000.00 from his brother. The husband says that such an arrangement would not interfere with the ongoing viability of the farming partnership as the integrity of the underlying land would be retained.
The Court must be conscious of the underlying nature of these farming assets on which the parental family has operated for many years. Time should be afforded to the husband to make considered decisions as to how he would fund the remaining payment to the wife. He has significant unencumbered rural property holdings. It may be that he simply finances his obligation to the wife. In the circumstances of this matter a period of 12 months would not be inordinately long with interest to accrue on any outstanding balance after six months.

The husband had afforded Company C Super and B Super notice of his proposed splitting orders in favour of the wife (Exh “Q” and “R”).
The wife should have liberty to apply as to enforcement of any money due and payable.
Such orders will, in the circumstances of this matter, be just and equitable.
Orders will be made accordingly.

I certify that the preceding one hundred and sixteen (116) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 9 November 2018.

Associate:

Date: 9 November 2018