Kalgreen & Kalgreen
[2023] FedCFamC2F 225
•23 March 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kalgreen & Kalgreen [2023] FedCFamC2F 225
File number(s): SYC 1834 of 2018 Judgment of: JUDGE MORLEY Date of judgment: 23 March 2023 Catchwords: FAMILY LAW – property – application for final orders – application for adjustment of property pursuant to section 79 – assessment of initial and post separation contributions – assessment of addbacks – assessment of Wife’s ‘Kennon claim’ – assessment of wastage arguments by both parties – where Court dismisses the Wife’s ‘Kennon claim’ – where Court dismisses both parties’ wastage arguments - where Court finds it is just and equitable for Wife to receive 67% of the property pool and the Husband 33% Legislation: Evidence Act 1995 (Cth), s 191
Family Law Act 1975 (Cth) ss 4AB, 75, 78 79, 117
Federal Circuit Court of Australia Act 1999 (Cth) s 65(2)
Limitation Act 1969 (NSW) s 14
Cases cited: AJO v GRO (2005) 191 FLR 317
Bacall & Zagar [2020] FamCA 350
Bergeron & Bergeron [2022] FedCFamC2F 644
Bevan & Bevan (2013) 279 FLR 1
Black v Kellner (1992) FLC 92-287
Browne v Greene [1999] FamCA 1483
Dickons & Dickons [2012] FamCAFC 154
Dupas v The Queen [2012] VSCA 328
Fields & Smith [2015] FamCAFC 57
Fontana & Fontana [2018] FamCAFC 63
Grier & Malphas (2017) 55 Fam LR 107
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (‘Hickey’) [2003] FamCA 395
Kowaliw & Kowaliw (1981) FLC 91-092
Kuhl & Zurich Financial Services (2011) 243 CLR 361
Masoud & Masoud [2016] FamCAFC 24
Oriolo v Oriolo (1985) 10 Fam LR 665
Shan & Prasad [2018] FamCAFC 12
Stanford & Stanford (2012) 247 CLR 108
Talbot & Talbot [2015] FamCAFC 132
Townsend & Townsend (1994) 18 Fam LR 505
Trevi & Trevi [2018] FamCAFC 173
Vass & Vass [2015] FamCAFC 51
Weir v Weir (1993) FLC 92-338
Division: Division 2 Family Law Number of paragraphs: 277 Date of last submission/s: 28 May 2021 Date of hearing: 28-30 October 2019 and 1-3 March 2021 Place: Sydney Counsel for the Applicant: Mr Coleman SC Solicitor for the Applicant: Edwards Moloney Family Law Counsel for the Respondent: Mr Sansom SC and Mr Othen Solicitor for the Respondent: Slat Family Lawyers ORDERS
SYC 1834 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS KALGREEN
Applicant
AND: MR KALGREEN
Respondent
ORDER MADE BY:
JUDGE MORLEY
DATE OF ORDER:
23 MARCH 2023
THE COURT ORDERS THAT:
1.Pursuant to section 79 of the Family Law Act 1975 (Cth), the Court orders that:
(a)Both parties be and are hereby jointly appointed Trustees for the sale of the property known as B Street, Suburb C in the state of New South Wales, being the whole of the land in Folio Identifier … (‘the Suburb C property’).
(b)Both parties be and are hereby ordered to sign all necessary documents, writings and things to list for sale and sell the Suburb C property within thirty (30) days in the manner herein provided. The husband will within three (3) days nominate in writing three (3) real estate agents that he proposes shall conduct the sale of the Suburb C property, and the wife shall select one of those agents within a further three (3) days.
(c)To facilitate the conduct of the sale of the Suburb C property pursuant to this order, the following provisions apply:-
(i)The Suburb C property shall be listed at a price (including a reserve price if it is to be sold at auction) and in a manner (i.e. private treaty or auction) agreed between the parties and in the event of any disagreement as to either price or manner the same shall be determined by the President of the Australian Property Institute (New South Wales Division) or an agent appointed by him for that purpose;
(ii)The parties will appoint a solicitor to act in relation to the sale of the Suburb C property and if the parties cannot agree on the solicitor to be appointed, the husband will nominate three (3) solicitors and the wife will select one (1);
(iii)If any dispute arises as to the appointment of a solicitor, then a solicitor will be appointed by the then President of the Law Society of NSW (‘the Solicitor’);
(iv)All costs incurred by the parties in appointing the Agent, the Valuer and the Solicitor will be shared equally between the parties and will be deducted from the proceeds of sale and reimbursed to the parties prior to a distribution of the net proceeds between the parties taking place;
(d)In the event that the Suburb C property is not sold within eight (8) weeks of the date of being first listed for sale by private treaty or auction as the case may be, (“the listing period”) then the Suburb C property is to be remarketed for a further eight (8) weeks (“the further listing period”) at a reduced price as agreed between the parties, or at a reduction of 5%.
(e)In the event that the Suburb C property remains unsold after the expiry of the further listing period, the Suburb C property shall thereafter be marketed at a further reduction of 5% per period of 8 weeks until sold unless otherwise agreed or ordered.
(f)The parties shall each co-operate in every way with the Agent, including (without limiting the generality of the foregoing):
(i)Making any relevant keys available to the Agent;
(ii)Allowing inspection of the Suburb C property at all reasonable times requested by the Agent;
(iii)Doing or saying nothing to hinder or prevent the sale being effected;
(iv)Ensuring the Suburb C property, including the grounds, is in a neat and clean condition at the time of inspection by the Agent and prospective purchasers; and
(v)Signing all documents requested by the Agent relating to the listing for sale of the Suburb C property except a contract of agreement for sale which has not been authorised by the parties’ solicitors.
(g)In relation to any correspondence with the Agent/s appointed for the sale of the Suburb C property and the Solicitor/s appointed for the sale of the Suburb C property, all communication from the parties shall be in writing and copied to the other party and should either party receive communication from the solicitor/s or agent acting on the sale of the Suburb C property which has not been copied to the other party, they shall forward same to the other party within forty-eight (48) hours of receiving same.
(h)Upon completion of the sale of the Suburb C property, the proceeds of sale will be paid in the following manner and priority:-
(i)In payment of Agent’s commission and legal and all other proper costs of sale;
(ii)In payment of any taxes and/or duties arising by virtue of the sale;
(iii)In payment to the Commonwealth Bank of Australia of a sum sufficient to discharge the loan facilities secured over the Suburb C property; and
(iv)In payment to J Pty Ltd of such sum as may be owing by either of the parties to that body.
(v)The remaining proceeds upon completion of the sale of the Suburb C property will be divided between the parties so as to achieve an overall division between them of 67% to the Wife and 33% to the Husband where the Husband has net assets valued at $439,082 and the Wife has net assets valued at $119,391.
(i)That pending the sale of the Suburb C property pursuant to this order, the Wife shall:
(i)Have exclusive occupation of the Suburb C property and the Husband shall not enter the property or its grounds without the express prior approval of the Wife;
(ii)Pay as and when same fall due for payment, the mortgage payments on the Suburb C mortgage (subject to any agreement between the wife and Commonwealth Bank of Australia) and all other outgoings on the property;
(iii)Be permitted by this order, without the consent of the husband, and this order shall be sufficient authority do so, to draw from the Suburb C mortgage such amount as may be necessary to prepare the property for sale including replacing the fences, painting the house, repairing the laundry, landscaping and gardening and all such other repairs or improvements as may be recommended in writing by the agent.
(j)Upon receipt of his share of proceeds of sale pursuant to this order, and to the extent that funds permit, the husband is ordered to pay:
(i)To the Legal Aid Commission of NSW and any amount owing to the Legal Aid Commission of NSW for the husband’s share of the costs of the Independent Children’s Lawyer pursuant to the Orders made by the court on 3 March 2021;
(ii)To Child Services Australia Child Support, such amount as is necessary to discharge all child support arrears in respect to case reference number …;
(iii)To U School, Suburb V, such amount as may be necessary to discharge any amount owing by the husband for his 50% share of the school fees for X born in 2007;
(iv)To W School, Suburb V, such amount as may be necessary to discharge any amount owing by the husband for his 50% share of the school fees for Y born in 2009 and/or Z born in 2012; and
(v)To AA School, such amount as may be necessary to discharge any amount owing by the husband for his 75% share of the school fees for Z (pursuant to the orders made by consent on 23 May 2018).
(k)That except as specifically provided for anywhere else in this Order to the contrary, as against the wife, the husband is declared the sole owner of and the wife has no interest in the following:
(i)The husband’s car;
(ii)The husband’s savings;
(iii)The husband’s shares;
(iv)The husband’s interest in OO Company;
(v)The husband’s interest in CC Company;
(vi)The husband’s interest in DD Company;
(vii)The husband’s superannuation; and
(viii)All other assets and resources of whatsoever nature and kind in the husband’s name, possession or control.
(l)That except as specifically provided for anywhere else in this order, to the contrary, as against the husband, the wife is declared the sole owner of and the husband has no interest in the following:
(i)The wife’s car;
(ii)The wife’s savings;
(iii)The furniture in the Suburb C property;
(iv)The wife’s interest in G Company;
(v)The wife’s superannuation; and
(vi)All other assets and resources of whatsoever nature and kind in the wife’s name, possession or control.
(m)Each party shall indemnify the other with respect to any liabilities in their own name, and to the extent either party has been director or shareholder of any company now solely in the ownership and directed by the other, the other party hereby indemnifies them in relation to any liability which may arise from their shareholding or office held in such company.
2.In the event that either party fails or refuses to sign any document or instrument required to give effect to these orders, then the Court appoints pursuant to section 106A of the Family Law Act 1975 (Cth), the Registrars of the Federal Circuit and Family Court of Australia, Sydney Registry, to sign such document or instrument in place of the party who has so failed or refused to sign, and further appoints those Registrars to do all things necessary to give effect to any such document or instrument.
3.Grant leave for any party to file and serve written submissions in relation to costs by 4:00PM on 6 April 2023.
4.Grant leave for any party to file and serve any written submissions in reply by 4:00PM on 20 April 2023.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Kalgreen & Kalgreen has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MORLEY:
The Applicant Wife, Ms Kalgreen born in 1975 (“the wife”), and the Respondent Husband, Mr Kalgreen, born in 1971 (“the husband”), commenced cohabitation in 2004. The parties were married in 2006 and separated on 5 September 2017 when the husband vacated the matrimonial home leaving the wife and their children in occupation.
There are three children of the relationship – X born in 2007, Y born in 2009 and Z born in 2012, aged respectively 15 years, 13 years and 11 years at the conclusion of the final hearing.
The final hearing took place on 28, 29 and 30 October 2019 and 1, 2 and 3 March 2021. Mr Coleman of Senior Counsel appeared for the wife. Mr Sansom of Senior Counsel appeared for the husband on 28 to 30 October 2019 and Mr Othen of Counsel appeared for the husband on 1 to 3 March 2021. Mr Holmes, solicitor, appeared as the Independent Children’s Lawyer (“the ICL”).
The final hearing related to both parenting and property alteration issues. Final orders resolving all of the parenting issues were made by consent on the last day of the final hearing on 3 March 2021. Accordingly, much of the evidence in chief for the parties and the oral evidence in cross examination that related only to the parenting issues with no relevance to the property alteration issues is not considered in these Reasons.
THE PROCEEDINGS
It is relevant in this matter to traverse some of the interlocutory proceedings and interim orders leading up to the final hearing. In that regard it is important to note at the outset that on separation the parties were the registered proprietors as joint tenants of real property being the matrimonial home at B Street, Suburb C NSW (“the Suburb C property”). The husband was the sole registered proprietor of real property being a rural farm property at Town F composed of several separate titles at E Street, Town F NSW (“the Town F property”). The parties were jointly indebted in relation to several loan accounts cross secured on both real properties, and an overdraft secured on the Suburb C property.
The proceedings were commenced by the wife filing an Initiating Application on 23 March 2018 relating to property alteration issues. The husband filed his Response on 21 May 2018 in relation to both property and parenting issues, and the wife filed her Reply in relation parenting issues on 18 August 2018.
At the first return date on 23 May 2018, various interim orders were made by consent including that the husband would pay, subject to his ability to do so, the payments required on all loan accounts secured by mortgages on either or both of the Suburb C property and the Town F property. The husband’s payments relating to loans secured on the Suburb C property were acknowledged as payments in lieu of child support payments pursuant to these orders.
In late June 2019 the husband purported to enter into a Deed of Put and Call relating to the Town F property with Mr & Mrs T, who were owners of an adjoining property. When the proposed transaction came to the wife’s notice she filed an interim application before the Court, and on 2 July 2019 orders were made on an urgent basis dealing with any monies paid to the husband by way of a call option fee and requiring the husband to provide some detailed disclosure to the wife in relation to the proposed transaction and the details of a lease agreement between the husband and the Mr & Mrs T concerning that property. The matter was put over for further consideration to 5 July 2019, on which day further interim order was made requiring the husband to seek the wife’s consent in writing no later than 24 hours prior to executing any Deed, Agreement or Contract for Sale purporting to deal with the Town F property and putting the matter over for further consideration to 11 July 2019. The wife’s costs of 2 and 5 July 2019 were reserved.
On 11 July 2019 by consent, orders were made which enabled the husband to proceed with the proposed Put and Call option arrangement and Contract for Sale of the Town F property, and a Deed of Forbearance between the husband and the Commonwealth Bank of Australia (‘CBA’). Further orders were made by consent for the husband, pending further order, to pay all payments due and owing to the CBA in relation to the loan accounts in overdraft secured on the Town F property and for the wife to make all such payments in relation to loan accounts secured on the B Street, Suburb C property.
The matter was listed on an expedited basis to a Call-Over on 26 September 2019 for allocation of final hearing dates and the making of trial directions. Leave was granted for both parties to relist the matter on an urgent basis in relation to implementation of the orders of 11 July 2019.
On the application of the husband, pursuant to the leave to relist granted on 11 July 2019, proceedings were relisted before the Court on 16 August 2019. The husband indicated that he intended to file an urgent Application in a Case seeking orders for the sale of both real properties in consequence of an asserted danger that defaults in payments required of certain loans could lead to bankruptcy proceedings against him. Directions were made for the filing of an Application in a Case and Response, and the matter was set down for an interim hearing on 11 September 2019. The matter was also set down for final hearing on 28, 29 and 30 October 2019 and trial directions were made.
On 11 September 2019 orders were made appointing both parties as trustees for sale of the Town F property and extensive machinery orders for the sale, with a view to various of the pressing liabilities being paid from the proceeds of sale so as to stave off what was looming as bankruptcy proceedings against the husband. During the interim hearing leading to such orders, an oral application was made by the wife that the Husband pay her costs on an indemnity basis in the sum of $10,000. That application was adjourned for consideration in the final hearing.
The first three days of the final hearing took place on 28 to 30 October 2019 and the matter was adjourned to 28 and 29 April 2020 part heard. These dates were later vacated due to SARS‑CoV-2 (“COVID-19”) pandemic.
On 10 January 2020, the husband filed an Application in a Case seeking urgent orders for the sale of the Suburb C property. The husband sought the proceeds of the sale of the Suburb C property be applied to:
(a)Discharge the loans secured on the Suburb C property with the Commonwealth Bank;
(b)Pay the judgement debt owed to K Ltd;
(c)Pay the parties’ joint debt to J Pty Ltd; and
(d)Pay the husband’s debt for legal fees of the proceedings to N Law Firm.
The husband further sought that the parties each receive $100,000 from the sale, and the balance remaining be held as controlled monies in the solicitors for the husband’s trust account, pending final orders.
On 30 January 2020 the wife filed a Response to Application in a Case seeking that the husband’s Application in a Case be dismissed and that she be appointed sole trustee for the sale of the Town F property. Upon sale of the Town F property, the wife sought the proceeds be applied to:
(a)Pay all proper costs and expenses of sale;
(b)Discharge the Business Loans with the Commonwealth Bank account ending #...89, #...41 and #...27;
(c)Pay the outstanding rates on the Town F property;
(d)Pay the husband’s debt to K Ltd;
(e)Pay the parties’ joint debt to J Pty Ltd; and
(f)Pay any balance remaining into the loan account with the Commonwealth Bank secured on the Suburb C property.
In any event, the parties reached a consent position in relation to the competing interim applications and on 10 March 2020, orders were made in Chambers by consent dismissing the husband’s Application in a Case and reserving the wife’s costs of and incidental to responding to the husband’s Application in a Case and appearing at a mention thereof on 28 January 2020, to be determined upon final hearing.
On 14 April 2020, the wife filed an Application in a Case seeking that she be appointed as the sole trustee of the Town F property, that application coming before the Court on 29 April 2020, on which day, whether before or after the interim hearing was never clear, the husband filed a Response to Application in a Case seeking interim parenting orders and again seeking orders for sale of the Suburb C property. The interim property matters were heard on that day and judgment was reserved.
An oral application was made by the Independent Children’s Lawyer (ICL) for the husband to pay the ICL’s costs for preparation for the mention on 29 April 2020 and for appearing because no application for interim parenting orders was made by the husband in sufficient time for it to be dealt with that day, despite the husband’s notification to the ICL that same would be made and pressed on that day, causing the ICL to appear before the Court unnecessarily.
Judgment was delivered on 6 August 2020 and orders were made for the wife to be appointed sole trustee for sale of the Town F property with the proceeds of any sale to be applied as had been set out in the original orders for sale of the property on 11 September 2019, not as per the wife’s application. An order was also made that the husband pay the ICL’s costs in a sum of $1,050, payable to the Legal Aid Commission of NSW within 12 months. An order was also made restraining the husband by injunction from:
(a)Transferring, assigning, leasing, encumbering or alienating any asset in which he has an interest except with the prior written consent of the wife after providing her 14 days notice in writing, and
(b)From entering into or incurring any further debt.
On 24 February 2021, the husband filed an Application in a Case seeking to vary order 7 of the orders made on 6 August 2020 to enable him to borrow up to $120,000 plus interest and charges from EE Trust to fund his legal costs of the proceedings and for that lender to lodge a caveat on title to the B Street, Suburb C property. On that same day, the Town F property was sold for over $1.7 million. Unfortunately, the husband had already entered into the litigation lending arrangement with EE Trust on 3 February 2021 contrary to the injunctive order made on 6 August 2020.
On 26 February 2021, an order as sought by the husband was made enabling him to borrow $120,000 plus interest and charges from EE Trust to fund his legal costs of the proceedings, and permitting the lodgement of a caveat over the B Street, Suburb C property. The costs of the husband and wife of the husband’s Application in a Case were reserved.
The final hearing continued on 1 to 3 March 2021 and on the final day final parenting orders were made by consent. Each of the parties was ordered to pay $4,770.25 toward the ICL’s legal costs, payable to the Legal Aid Commission of NSW within 90 days of final property orders being made. Directions were made for written submissions to be filed and served. The last of the written submissions pursuant to the directions were filed and served on 24 June 2021.
On 31 May 2021 a divorce order was made, which became final on 1 July 2021.
On 25 June 2021 judgment was reserved. On 29 June 2021 an order was made by consent pursuant to a Minute of Order received by Chambers, that the husband not enter the Suburb C property without the express written permission of the wife.
On 9 September 2021, the husband filed an Application in a Proceeding seeking leave to reopen open the evidence in the final hearing to provide updated valuation evidence in relation to the Suburb C property. In consequence of that application, judgment was unreserved on 28 September 2021 and orders were made by consent granting leave to reopen open the evidence in relation to the value of the Suburb C property and reserving costs of that application.
On 12 January 2022, the wife filed an Application in a Case seeking leave to reopen the evidence so as to lead evidence in relation to:
(a)Arrears of child support owed by the husband;
(b)Arrears of school fees owed by the parties; and
(c)The status of the lodgement of tax returns by both the husband and the wife.
On 14 April 2022, directions were made for the parties to prepare, settle and file a Statement of Agreed Facts and a Statement of Matters Remaining in Issue by 4:00PM on 22 April 2022, and again reserving costs of the application.
On 14 June 2022 orders were made by consent stating:
(a)Agreed facts;
(b)Facts contended by the wife and not agreed by the husband; and
(c)Facts contended by the husband and not agreed by the wife.
The wife’s Application in a Case filed 12 January 2022, and the husband’s Application in a Case filed on 9 September 2021 were both withdrawn and dismissed with no orders to be made in relation to costs. Judgment in relation to the final hearing was again reserved.
The material relied upon by the parties
The wife relied upon the following materials in relation to the financial issues on final hearing, and I note any materials relating solely to the parenting issues are not listed:
(a)Her Initiating Application filed 23 March 2018;
(b)Affidavit of the wife sworn 16 October 2019 and filed 17 October 2019 (“the wife’s trial affidavit”);
(c)Affidavit of the wife sworn 14 April 2020 and filed 17 April 2020;
(d)Financial Statement of the wife sworn or affirmed and filed 20 October 2019;
(e)Affidavit of Dr FF affirmed and filed 2 September 2019 (the redacted version);
(f)Affidavit of Ms GG sworn or affirmed 22 September 2019 and filed 24 September 2019;
(g)Her Updated Case Outline for final hearing on 28 – 30 October 2019, resuming on 1 March 2021, including her Chronology, and Balance Sheet;
(h)Her Written Submissions filed 23 April 2021;
(i)Her Submissions in Reply to the Husband’s Response to Submissions filed 24 June 2021; and
(j)Final property orders sought by the Applicant Wife on 28 October 2019, as updated on 22 April 2021 and 30 May 2022.
The wife also relied upon an affidavit by a certified practising valuer, Mr HH, affirmed 20 September 2019 and filed 24 September 2019 in relation to the value of the Suburb C property. However, the parties ultimately agreed upon the value of that property as one of the Agreed Facts in the orders of 14 June 2022 and so this evidence and that affidavit is no longer read.
The affidavit of the wife sworn 21 October 2019 and filed 22 October 2019 relates only to parenting issues and is not read.
The affidavit of the wife sworn and filed 29 April 2020 was not read in the wife’s case because it was dealt with by her Senior Counsel during cross examination of the husband.[1]
[1] See Transcript 1 March 2021, page 7, lines 30 to 35.
The husband relied upon the following materials on final hearing, and once again I note, any materials relating solely to the parenting issues are not listed:
(a)His Response filed 21 May 2018;
(b)Affidavit of the husband sworn 21 October 2019 and filed 22 October 2019 (“the husband’s trial affidavit”);
(c)Affidavit of the husband affirmed 23 February 2021 and filed 24 February 2021;
(d)Financial Statement of the husband sworn or affirmed and filed 23 October 2019;
(e)Affidavit of Ms JJ sworn 15 August 2019;
(f)Affidavit of Ms JJ sworn and filed 25 October 2019;
(g)His Outline of Case Document;
(h)His Submissions filed 9 June 2021; and
(i)The Minute of Orders sought by the husband, being Exhibit R13.
The husband also relied upon an affidavit by a certified practising valuer, Mr KK, sworn and filed 25 October 2019 in relation to the value of the Suburb C property, but the parties ultimately agreed upon the value of that property as one of the Agreed Facts in the orders of 14 June 2022 and so the evidence and that affidavit is no longer read.
The following documents were tendered and marked as exhibits relevant to the financial issues between the parties:[2]
[2] Any exhibits relating only to the parenting issues between the parties have been omitted, and any exhibits relating only to the value of the Suburb C property have also been omitted.
(a)Exhibit A1 – two page advices for Ms Kalgreen dated 13 October 2005 and 14 November 2005;
(b)Exhibit A2 – three page document being LL Trust account in the name of Ms Kalgreen account number ending #...30 April to 31 May 2004, 31 March to 28 April 2006 and 30 June 2 31 July 2006;
(c)Exhibit A3 – NN Investments Statement for account number ending #...55 in the name of Ms Kalgreen for the period 11 April 2004 to 31 December 2006;
(d)Exhibit A4 – caveat registered number … by K Ltd on land title reference …;
(e)Exhibit A5 – 7 page document being a spreadsheet breakdown prepared by the husband as to “Farm Income and Expenditure (Business Account);
(f)Exhibit A12 – Transcript of the proceedings on 28 October 2019;
(g)Exhibit A13 – Transcript of the proceedings on 29 October 2019;
(h)Exhibit A14 – Transcript of the proceedings on 30 October 2019;
(i)Exhibit A15 – Bundle of correspondence between the parties’ solicitors between 27 September 2019 and 25 Fairbury 2021;
(j)Exhibit A17 – Bundle of bills to Letters Deliver from 7 November 2022 5 February 2021;
(k)Exhibit A18 – Husband’s Notice of Assessment for the year ended 30 June 2017;
(l)Exhibit A19 – Husband’s draft Individual tax return 2017;
(m)Exhibit A20 – Husband’s draft Individual tax return 2018;
(n)Exhibit A21 – Husband’s draft Individual tax return 2019;
(o)Exhibit A22 – Heads of Agreement document dated 22 June 2020 between Commonwealth Bank of Australia in the husband and the wife;
(p)Exhibit A23 – Financial Statements for the years 2018 and 2019 for OO Company;
(q)Exhibit A24 – three emails each dated 27 October 2020 from the husband to named persons, each copied to the wife, relation to the children’s school enrolment for 2021;
(r)Exhibit A30 – Bank Statements for H Business Loans account ending #...41 for various time periods between 1 July 2017 and 2 February 2021;
(s)Exhibit A31 – Bank Statements for H Business Loans account ending #...89 for various time periods between 1 August 2017 and 23 December 2020;
(t)Exhibit A32 – Financial Statement for G Company for the year ended 30 June 2020; the wife’s Individual tax return 2020; Company tax return 2024 G Company;
(u)Exhibit R4 – Finance application form with PP Bank by the husband dated 26 February 2004;
(v)Exhibit R5 – 12 emails being in a bundle of 20 pages between the wife and the husband between 9 March 2016 and 26 October 2019;
(w)Exhibit R6 – Financial Statement for G Company for year ended 30 June 2015;
(x)Exhibit R7 – Financial Statement for G Company for year ended 30 June 2016 and Company tax return 2016 for that corporation;
(y)Exhibit R8 – Financial Statement for G Company for year ended 30 June 2017 and Company tax return 2017 for that corporation;
(z)Exhibit R9 – Financial Statement for G Company for year ended 30 June 2018 and Company tax return 2018 for that corporation;
(aa)Exhibit R10 – Wife’s Individual tax return 2018;
(bb)Exhibit R11 – Email correspondence between the Husband and the wife on 16 and 17 January 2018 across two pages)
(cc)Exhibit R12 – bundle of documents being 3 page “Farm Transaction Account”; 1 page table headed “Machinery Sales”; 1 page containing only the words “Net contribution by OO Company (a-(b+c) -47992.5”; and Table headed “[OO Company] Agents and Advisory transaction Account” over 2 pages;
(dd)Exhibit R13 – Minute of order sought by the Husband; and
(ee)Exhibit R14 – Objections to the affidavit of the wife 14 April 2020 with hand written notes in pencil by the court “All conceded by counsel for wife on 3/3/21. But not annexed email copies re those paragraphs.”
The wife was cross examined by Mr Sansom SC and the husband was cross examined by Mr Coleman SC. Neither Dr FF nor Ms GG were required for cross examination.
The competing applications of the parties
The wife sought the following orders as set out in her final minute of order:
DEFINITIONS
A.The Court NOTES the following definitions for the purpose of these Orders:
A.1. “wife” means [Ms Kalgreen].
A.2.“husband” means [Mr Kalgreen].
A.3.“[The Suburb C] property” means the property situated at and known as [B Street, Suburb C] in the State of New South Wales, being the whole of the land contained in Folio Identifier […] together with the improvements, fixtures and fittings erected thereon and/or attached thereto, of which the parties are the registered proprietors as joint tenants.
A.4.“CBA” means the Commonwealth Bank of Australia Limited.
A.5.“[Suburb C] Mortgage” means the mortgages having registered numbers […] and […] granted to CBA by the parties and which mortgages are secured upon the title to the [Suburb C] property.
A.6.“[Town F] Farm” means:
A.6 (1) the property situated at and known as [1 E Street, Town F], NSW, being the whole of the land contained in Folio Identifiers […] and […] together with the improvements, fixtures and fittings erected thereon and/or attached thereto, of which the husband is the sole registered proprietor; and
A.6 (2) the property situated at and known as [2 E Street, Town F], NSW, comprising of Folio Identifier […] of which the husband was the sole registered proprietor.
A.7.“CBA Farm Debt Facilities” means:
A.7 (1) the mortgage having registered number […] granted to CBA by the husband for which the wife and [G Company] are guarantors and which is also secured over the title to the [Suburb C] property, securing the [H Business Loans] account numbers […] and […]; and
A.7 (2) the CBA Overdraft account […] secured against the title to the [B Street, Suburb C] property and the [Town F] Farm; and
A.7 (3) the CBA Business Credit card […] in the husband’s sole name.
A.8.“Farm Assets” means the items located at the [Town F] Farm including but not limited to the farm equipment, [Motor Vehicle 1], [Equipment 1], [Motor Vehicle 2], [Motor Vehicle 5], [Equipment 2], and [Equipment 3], [Equipment 4] and any grain storage.
A.9.“husband’s car” means [Motor Vehicle 1].
A.10.“wife’s car” means [Motor Vehicle 3] registered in the name of [G Company].
A.11.“husband’s shares” means all shareholdings in publicly listed companies held in the husband’s sole name, including his shares in [YY Company].
A.12.“husband’s savings” means any funds held in bank accounts with any bank or financial institution in Australia or overseas and held in the husband’s sole name.
A.13.“wife’s savings” means any funds held in bank accounts with any bank or financial institution in Australia or overseas and held in the wife’s sole name.
A.14.“furniture in [Suburb C] property” means all furniture, furnishings and effects contained in the [Suburb C] property.
A.15.“[G Company]” means the wife’s interest in [G Company] having ACN […] of which the wife is the sole director and sole owner of the 100 issued ordinary shares.
A.16.“[OO Company]” means the husband’s interest in [OO Company] having ACN […] of which the husband is the sole director and sole owner of the 100 issued ordinary shares.
A.17.“[CC Company]” means the husband’s interest in [CC Company] having ACN […] of which the husband is the sole director and sole owner of the 1 issued ordinary share.
A.18.“[DD Company]” means the husband’s interest in [DD Company] having ACN […] of which the husband is one of two directors and shareholders holding 500 of the 1,000 issued ordinary shares.
A.19. “husband’s superannuation” means the husband’s entitlement in any superannuation fund or policy in Australia and overseas.
A.20.“wife’s superannuation” means the wife’s entitlement in any superannuation fund or policy in Australia and overseas.
A.21.“debt owing to [J Pty Ltd]” means the debt owing by the parties for renovation works to the [Suburb C] property as invoiced by [J Pty Ltd] previously at $58,841.16 which was reduced to $32,934.97 after the settlement of the sale of the [Town F] Farm.
A.22.“[K Limited]” means [K Limited] (ACN […]).
A.23.“debt owing to [K Limited]” means the debt (including principal, interest and legal fees) owing by the husband to [K Limited] in respect of which a Statement of Claim was filed in the New South Wales District Court and judgement entered in the sum of $174,460.20 [in] 2019 in respect of which a bankruptcy notice has been filed and service on the husband which debt was discharged from the sale proceeds of the [Town F] Farm in the sum of $211,000.
A.24.“Caveats” means the caveat lodged by [K Limited] over the husband’s interest in the [Suburb C] property; the caveat lodged by [RR Law Firm] and [N Law Firm]; and the caveat lodged by [EE Trust] securing the loan obtained by the husband for his legal fees in February 20201 of up to $147,000.
A.25. “[SS Company] debt” means debts owing by the husband for fuel and fertiliser, being approximately $15,512.97 now repaid.
A.26.“Other Farm debts” means other debts related to the [Town F] Farm incurred by the husband, including but not limited to the debt of $10,098 owing to [TT Company] now repaid.
A.27. “husband’s credit cards” means any personal credit card or charge card accounts held in the husband’s name with any bank or financial institution.
A.28.“wife’s credit cards” means any personal credit card or charge card accounts held in the wife’s name with any bank or financial institution.
A.29.“wife’s personal loan” means any monies owing by the wife to her parents and brother for the payment of legal fees.
A.30.“husband’s debt to [N Law Firm]” means any money owed by the husband for legal fees to his former lawyers in these proceedings [N Law Firm] including the sum of $30,000 plus fees and interest of $19,760.73.
PROPERTY ORDERS
1.That within 90 days of the date of making of Orders, the husband do all acts and things and sign all documents necessary so as to transfer the whole of his right, title and interest in the [Suburb C] property to the wife.
2.That simultaneously with Order 1:
2.1.The husband and wife do all acts and things and sign all documents so as to discharge the [Suburb C] Mortgage and the wife shall refinance the balance owing on that mortgage into her sole name;
2.2.The husband do all acts and things so as to discharge his debts to [K Limited], [N Law Firm], [RR Law Firm] and [EE Trust] and cause the Caveats to be withdrawn at his cost.
3.That in the event that this Honourable Court makes orders which give the husband a share of the [Suburb C] property, that the wife pay such amount to the husband or as he may direct within 90 days of the date of order and in the event the wife defaults under this order, then Orders 4 to 6 apply.
4.That the wife is hereby appointed the sole Trustee for the sale of the [Suburb C] property and shall do all acts and things and sign all documents necessary so as to effect a sale of the [Suburb C] property for the best price reasonably obtainable in the following manner:
4.1List the [Suburb C] property for sale within ninety-seven (97) days from the date of making of these Orders, with such agent as the wife chooses to appoint (the “agent”) by either private treaty or public auction as may be recommended by the agent;
4.2Appoint such conveyancer or solicitor to act on the sale of the property as she chooses; (the “solicitor”);
4.3The parties by this Order hereby authorise and direct the agent and solicitor acting on the sale of the [Suburb C] property to communicate with both parties but to obtain instructions only from the wife in relation to all aspects of the sale of the [Suburb C] property;
4.4The listing or reserve price for the purpose of such sale shall be as advised by the agent to the wife (and copied to the husband) in writing;
4.5The wife shall cooperate in every way with the sales process including (without limiting the generality of the foregoing):
4.5.1permitting access to the property to the agent at all reasonable times;
4.5.2doing or saying nothing to hinder or prevent a sale being effected;
4.5.3ensuring the [Suburb C] property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers.
5.That in the event that the [Suburb C] property is not sold within 8 weeks of the date of being listed for sale (“the listing period”), then the property is to be remarketed for sale, (the “further listing period”) at such reduced price as recommended by the agent in writing to the wife (and copied to the husband) until sold.
6.On settlement of the sale of the [Suburb C] property the proceeds of sale shall be paid and disbursed in the following manner and priority:
6.1.All costs and expenses of sale including legal costs and disbursements, agents commission and auction expenses;
6.2.The amounts required to discharge the [Suburb C] Mortgage and including such amount as may be necessary to repay or discharge any debt incurred by the wife for the payment of any expenses as may be incurred by her pursuant to Order 75.3;
6.3.The amounts required to pay all municipal and water rates outstanding with respect to the [Suburb C] property;
6.4.The amount required to discharge the debt owing to [J Pty Ltd];
6.5.To the husband or as he may direct, such amount as may be ordered by this Honourable Court from which shall be deducted and paid therefrom prior to any payment to the husband the following (to the extent that the funds permit):
6.5.1.To the wife any amount as may be ordered to be paid to the wife by way of costs orders in these proceedings (refer to Order 13 herein);
6.5.2.To the Legal Aid Commission of NSW and any amount owing to the Legal Aid Commission of NSW for the husband’s share of the costs of the ICL pursuant to the Orders made by the court on 3 March 2021;
6.5.3.To Child Services Australia Child Support, such amount necessary to discharge all child support arrears in respect to case reference number […90];
6.5.4.To [U School], such amount as may be necessary to discharge any amount owing by the husband for his 50% share of the school fees for [X] born 2007;
6.5.5.To [W School], such amount as may be necessary to discharge any amount owing by the husband for his 50% share of the school fees for [Y] born 2009 and /or [Z] born 2012 (“[Z]”); and
6.5.6.To [AA School], such amount as may be necessary to discharge any amount owing by the husband for his 75% share of the school fees for [Z] (pursuant to the orders made by consent on 23 May 2018).
6.6. The balance to the wife or as she may direct in writing.
7.That pending the transfer, pursuant to Order 1 or the settlement of the sale of the [Suburb C] property pursuant to Order 64, the wife shall:
7.1. Have exclusive occupation of the [Suburb C] property and the husband shall not enter the property or its grounds without the express prior approval of the wife;
7.2.Pay as and when same fall due for payment the mortgage payments on the [Suburb C] mortgage (subject to any agreement between the wife and CBA) and all other outgoings on the property;
7.3.Be permitted by this order, without the consent of the husband, and this order shall be sufficient authority do so, to draw from the [Suburb C] mortgage such amount as may be necessary to prepare the property for sale including replacing the fences, painting the house, repairing the laundry, landscaping and gardening and all such other repairs or improvements as may be recommended in writing by the agent.
8.That except as specifically provided for by any Order comprising this Order to the contrary, as against the wife, the husband is declared the sole owner of and the wife has no interest in the following:
8.1The husband’s car;
8.2The husband’s savings;
8.3The husband’s shares;
8.4The husband’s interest in [OO Company];
8.5The husband’s interest in [CC Company];
8.6The husband’s interest in [DD Company];
8.7The husband’s superannuation; and
8.8All other assets and resources of whatsoever nature and kind in the husband’s name, possession or control.
9.That except as specifically provided for by any Order comprising this Order to the contrary, as against the husband, the wife is declared the sole owner of and the husband has no interest in the following:
9.1.The wife’s car;
9.2.The wife’s savings;
9.3.The furniture in the [Suburb C] property;
9.4.The wife’s interest in [G Company];
9.5.The wife’s superannuation; and
9.6.All other assets and resources of whatsoever nature and kind in the wife’s name, possession or control.
10.That except as specifically provided for by any Order comprising these Orders to the contrary:
10.1.The husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband, including but not limited to the […] Farm Debt Facilities, the [K Limited] debt and associated legal and administrative fees, [SS Company] debt, the other farm debts, the husband’s debt to [N Law Firm], [RR Law Firm] and [EE Trust] and the husband’s credit cards;
10.2.The wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to, all liabilities in the name of the wife, including the wife’s credit cards, the wife’s personal loan, and any debts of [G Company].
11.That except as specifically provided for by any Order comprising these Orders to the contrary, each of the husband and the wife release the other from all debts owing from one to the other.
12.If any of the parties to these Orders fails, refuses or neglects to assign any instrument or other document, the execution of which is provided for by any of these Orders, then pursuant to s106A of the Family Law Act 1975 that party hereby consents to any Application filed by another party seeking an Order appointing the Registrar of the Sydney Registry of the Federal circuit Court of Australia to execute such instruments or other documents in the name of the defaulting party.
COSTS
13.That the husband pay the wife’s costs of and incidental to these proceedings on an indemnity basis including but not limited to the following:
13.1.The costs of and incidental to the interim proceedings on 11 September 2019 in respect of which costs are sought in the sum of $10,000 (see exhibit R1 on 11 September 2019).; and
13.2.The costs of and incidental of the wife’s response to the husband’s Application in a Case filed 10 January 2020 including the preparation of her Response to Application in a Case and Affidavit filed 30 January 2020, such application being dismissed by consent by orders made 10 March 2020;
13.3.The costs of and incidental to the wife’s attendance by senior counsel instructed by her lawyer at the interim hearing before this Court on 3 April 2020;
13.4.The costs of and incidental to the wife’s preparation of her Application in a case and Affidavit in support filed 14 April 2020 and attendance by her senior counsel instructed by her lawyer at the contested hearing on 28 April 2020 noting that the wife was wholly successful in her application when judgement was delivered by this Honourable Court on 6 August 2020 when her costs were reserved.
The husband sought the following orders as set out in his final minute of order marked as Exhibit R13:
Property adjustment
1.That orders be made in terms of orders 1-8 made 11 September 2019, except substituting the [Suburb C] property for the [Town F] Farm property throughout.
2.That the proceeds of sale including any deposit paid shall be paid out in the following order and priority:
ATo pay all costs of the sale, including agents’ fees and commission, and legal costs of the conveyance;
BTo the usual conveyancing deductions;
CTo discharge the mortgage secured against the title by CBA;
DTo discharge the liability to [J Pty Ltd];
ETo discharge all liability the husband has to [N Law Firm], [RR Law Firm] and [EE Trust] sufficient to obtain those creditors’ consent to the removal of their caveats, noting the husband is solely liable for these amounts;
FFrom the balance then remaining the wife shall receive a lump sum calculated as 50% of the proceeds of sale of the property after the liabilities at sub paragraphs A-D have been deducted only;
GThe husband shall receive the balance then remaining.
3.Each party is restrained by injunction from further encumbering their interest in the [Suburb C] property in any way without the written consent of the other.
4.The wife is solely liable for and shall pay as and when the same fall due all mortgage instalments due on the mortgage secured over the title to the [Suburb C] property until settlement of the sale, and any arrears of mortgage owing at date of settlement shall be her sole liability and shall be paid form her entitlements at settlement.
5.Each party shall otherwise retain their own assets and shall be liable for their own liabilities.
6.Each party shall indemnify the other with respect to any liabilities in their own name, and to the extent either party has been director or shareholder of any company now solely in the ownership and directed by the other, the other party hereby indemnifies them in relation to any liability which may arise from their shareholding or offie held in such company.
7.All outstanding applications otherwise dismissed.
THE EVIDENCE
The parties commenced cohabitation in 2004. They married in 2006 and separated on 5 September 2017 and the husband left the former matrimonial home, the Suburb C property. The parties’ three children, X, Y and Z remained living with their mother at the Suburb C property to the conclusion of the hearing.
At the commencement of cohabitation, the wife had:
(a)A motor vehicle, savings of approximately $22,000;
(b)An investment in a managed fund with NN Investments realised by the wife in the sum of $10,000, the savings and the managed fund having a combined value of $31,448, and;
(c)Superannuation entitlements of approximately $30,000.
The husband had:
(a)Motor Vehicle 4 valued at about $15,000;
(b)Equity in real property at UU Street, Suburb VV (“the Suburb VV property”);
(c)Some savings of an unknown amount; and
(d)Superannuation entitlements with Super Fund 1 of approximately $110,000.
The husband had purchased the Suburb VV property in his sole name in 2004, settling the purchase in 2004, at a purchase price of $680,000. He borrowed $535,000 from PP Bank for the purchase and gave that bank a first registered mortgage over the property, funding the balance of the purchase price being $145,000 and stamp duty and costs of purchase from his savings.
The husband undertook some renovations to the Suburb VV property in 2004 to prepare the property for occupation by the parties when they commenced cohabitation, and generally continuing after occupation by the parties. The husband asserts that he applied between $145,000 and $150,000 from the “further savings held by me” towards the renovations of the Suburb VV property. The husband was assisted with the labour relating to the renovations by the wife. The value of the husband’s equity in the Suburb VV property at the commencement of cohabitation in 2004 following the renovations is not known, but cohabitation commenced at about the time of settlement – the sale price and loan account gave him an equity of $145,000.
During cross examination of the wife by Senior Counsel for the husband it was put that “there seems to be agreement that when you begin or began cohabitation, [Mr Kalgreen] had an equity of about $145,000 in the [Suburb VV] property”, to which the wife replied, “Yes.”
At commencement of cohabitation the parties maintained separate bank accounts, each having their earned income paid into their own account. The husband asserts that his income was applied toward the cost of renovations to and the loan account payments for the loan secured on the Suburb VV property and for “living and day to day expenses”.
Upon commencement of cohabitation, the wife commenced depositing a sum of $630 each month into the husband’s bank account as contribution toward repayment of the loan accounts secured by mortgage on the Suburb VV property and also contributed towards payment of utility costs and other household expenses. The husband asserts that these deposits by the wife ceased after about six months, whereas the wife asserts that they continued until she commenced maternity leave for the birth of X.
The husband asserts that between April 2006 and September 2009 he made the loan repayments on the loan account secured by mortgage on the Suburb VV property from his income, making those payments in excess of the amount required by the bank.
In September 2009 the husband refinanced the Suburb VV property with CBA, paying out the PP Bank loans and discharging their mortgage and granting CBA a mortgage over the Suburb VV property to secure to loan accounts for a total sum of $652,000. Between purchase of the Suburb VV property on finance from PP Bank and the refinance with CBA the loan accounts with PP Bank had been reduced from $265,000 to $241,403.90 on one loan and from $270,000 to $114,544.38 on the other loan, a total of $179,051.78 between April 2004 and September 2009.
The husband sold the Suburb VV property in 2012 for just under $1,100,000. I note the amount is misstated as closer to $1,000,000 in paragraph 20 of the wife’s trial affidavit.
Following the parties’ marriage in 2006 the wife transferred to the husband’s bank account $24,000 in July 2006.[3] The wife also sold her shareholdings for approximately $22,000 and transferred those monies to the husband. The wife asserts that both amounts were then applied by the husband to reduce the loan accounts secured on the Suburb VV property.
[3] Exhibit A2.
From 2003 until 2007 the wife was employed as a professional earning about $120,000 per year. At about the time of the birth of the parties’ first child, X who was born in 2007, the wife took maternity leave for about a year between 2007 and 2008. When the wife returned to work part-time she was earning about $70,000 per year until 2009 when she again went on maternity leave in 2009 until 2010 in anticipation of the birth of Y, born in 2009. The wife then returned to work again on a part-time basis as a professional earning about $80,000 per year until 2010. At first, the wife worked three days per week and she then increased to four days per week with one of those days spent working from home in about mid 2010.
Since September 2010, or on the husband’s evidence June 2008,[4] the wife has run her own company, G Company, and she continued to operate that company up to the hearing.
[4] Paragraph 39 of the husband’s trial affidavit.
At cohabitation the husband was employed as a professional with WW Company on a full-time basis and had been in that employment since 1999. He ceased that employment in 2006 and commenced working for XX Company as a Manager. He was made redundant from his position at XX Company in 2008 and was out of employment for between three and six months, or on the wife’s evidence three months, until in that same year he gained employment with YY Company as a professional. The husband remained in that employment until 2014.
Between 2008 and 2010 the husband was also a director, with the wife, of G Company.
In 2012 the husband incorporated CC Company of which he was the sole director and shareholder. The company was to be a trustee of a self-managed superannuation fund that did not eventuate and the company was deregistered in 2019. The company never traded and never lodged any tax returns of financial statements.
In late 2014, or on the wife’s evidence late 2015,[5] the husband incorporated OO Company, and he was sole shareholder and director. He resigned from the YY Company at that time, and proposed to trade through that corporation utilising his experience and his educational attainment of qualifications.
[5] Paragraph 35 of the wife’s trial affidavit.
In 2015 the husband incorporated DD Company together with an associate from his work days, but again, the company has never traded and has not lodged any tax returns or financial statements.
The husband sets out his taxable income for the years from and including 2007 to 2017 in paragraph 33 of his trial affidavit. The husband’s individual tax return for 2018 indicates that the husband’s taxable income for the year ended 30 June 2018 was $89,007.[6] The wife asserts in paragraph 43 of her trial affidavit that from 2015 to 2017 the taxable income from G Company was $125,000 to $145,000, dropping following separation to $45,471 in the 2018 financial year, and was $57,318 in the 2019 financial year
[6] Exhibit A20.
The wife was the primary carer for the children during the cohabitation from the birth of each child except for the period of the husband’s unemployment during 2008, when X was the only child and the husband looked after him two days per week while the wife was at work. X was in day care the other three working days of the week. From late 2010 the wife operated G Company from home. The husband worked long hours at his employment throughout the parties’ cohabitation, usually leaving home at about 7:30AM and returning home at about 7:00PM on weekdays.
During his cross examination, the husband conceded that the wife “did more of the day-to-day looking after of the children” than he did “in the early years when – particularly when the kids were younger.” He conceded that “in balance” the wife did the greater part of the caring for the children during their cohabitation.
In September 2009, the husband purchased land on two separate adjoining titles as the first part of the real property that would ultimately compose the Town F property for $1,014,083.40. The purchase was fully financed by two Business Loans, an overdraft account and a credit card account with CBA in a total sum of either $1,060,000 on the wife’s evidence, or $1,119,000 on the husband’s evidence. The husband began to spend time on occasional weekends at the farm property. The financing with CBA for purchase of the Town F property was cross secured on the Suburb VV property.
In 2017 the husband purchased the second part of the Town F property, a further 90 hectares of adjoining land and for $240,000, increasing the indebtedness with CBA to $1,356,449. All purchases of the land comprising the Town F property were in the husband’s sole name, though the wife and G Company were guarantors of the loan accounts secured by mortgage on the Town F property.
The husband operated a cropping business on the Town F property from 2009 until about 2017. Initially, the farming business on the Town F property was profitable and the husband was able to apply some income generated by operation of a farm business on the Town F property toward loan repayments, though such income was not sufficient to meet all such loan costs and shortfalls were met from the husband’s income. Between 2009 and 2017, the husband engaged K Ltd to provide finance facilities and support for the operation of the farm business on the Town F property.
In about September or October 2010, the parties with X and Y moved out of the Suburb VV property and into a larger rented premises at Suburb O. The parties utilised the rental income from the Suburb VV property towards payment of the loan accounts secured by mortgage on the Suburb VV property. The wife asserts that most of the rent for the Suburb O home was paid from her earnings through G Company.
The parties purchased the B Street, Suburb C property in October 2012 as joint tenants for a purchase price of $1,215,000 plus stamp duty and other costs of purchase.
The wife gives evidence in paragraph 54 of her trial affidavit that the Suburb C property purchase was financed with a loan of $100,000 from the wife’s parents and a bridging loan from CBA of $967,448, as the Suburb VV property had not been sold at this time. This would leave a shortfall of $145,000 on the purchase price alone without adding stamp duty and other costs purchase.
The husband asserts in his evidence that in addition to the monies borrowed from CBA and $100,000 borrowed from the wife’s parents, the parties also borrowed $100,000 from his mother. During her cross examination the wife categorically denied that such sum had been borrowed from the husband’s mother. The husband asserts that up to the time of the final hearing he had repaid $80,000 to his mother. The husband was specific in paragraph 74 of his trial affidavit that he did not seek inclusion of the balance of that debt of $20,000 “on the balance sheet”, meaning he did not wish this to be a factor in establishing the property of the parties for alteration under section 79 of the Family Law Act 1975 (Cth) (“the Act”).
On sale of the Suburb VV property the loan accounts relating to the purchase of the Town F property were cross secured on the Suburb C property, personal guarantees were given by each of the husband and the wife, and G Company also provided a guarantee. The wife asserts in her evidence that that there was some coercion and deception on the part of the husband in relation to these financial arrangements and liability, but the husband asserts that the wife signed the relevant bank documents of her own accord and “was not forced to sign any documents”.
Between purchase of the Suburb C property and sale of the Suburb VV property, the parties had bridging finance with Commonwealth Bank of $967,448. On sale of the Suburb VV property, the sum of $700,000 was deposited into the home loan account relating to the purchase of the Suburb C property thereby reducing the amount owing on that account to $264,395. By June 2016 the amount owing had been reduced to $104,989 by making extra payments over and above the required amounts for principal and interest.
Following purchase of the Suburb C property the parties, X and Y moved in and the husband commenced some renovations of the property. The wife conducted G Company from the garage of the Suburb C property with two employees. The parties employed, and the wife paid from her earnings, a cleaner and a nanny to assist with the homemaker role and the care of the children whilst the wife worked operating her business and the husband attended his employment.
The wife asserts that she remained responsible for the greater part of the balance of the homemaker and parenting duties, though she says in paragraph 35 of her trial affidavit that from the husband’s resignation from YY Company until separation in September 2017, the husband worked from home and “took a greater role in cooking and preparing food”. However, the parties still paid for the assistance of a cleaner and a nanny. During that period the parties shared the grocery shopping and cooking of meals and when the part-time nanny left in 2017, the husband assisted more with the school/day care drop-offs and collection until separation on 5 September 2017.
In June 2016 the parties obtained a redraw facility on the CBA home loan account secured on the Suburb C property in a sum of $300,000 to fund renovations to that property. Between June 2016 and October 2016 the parties applied the funds from that redraw account towards the costs of such renovations carried out by J Pty Ltd. The husband asserts in his evidence that he undertook some aspects of the renovation himself, such as painting and the purchase of items required and “repairs”. At the end of the renovations the parties owed a debt to J Pty Ltd of $77,841.16 per the final invoice as at 1 November 2017. The cost of the renovations had overrun the redraw facility amount available to the parties.
The wife asserts in paragraph 42 of her trial affidavit that she was the primary homemaker during the parties’ cohabitation, with the assistance of a cleaner and nannies and increasing assistance of the husband once he resigned from YY Company and worked from home.
The husband asserts in his evidence that he assisted the wife with the conduct of G Company by providing the wife with business advice and by lending the corporation monies on a short‑term basis from his personal CBA account ending #...59 at the wife’s request. These loans were repaid to the husband in due course, with the wife confirming that evidence during her cross examination.
In the course of the husband’s conduct of the farm business at the Town F property, he incurred a debt to K Ltd by 20 December 2017 of $157,992.68. A contributing factor to the debt was two years of successive crop failures at the farm. Presumably in pursuance of their rights under a charge granted to K Ltd by the husband in an agreement dated 18 February 2010, as part of the contractual arrangement between the company and the husband, K Ltd registered a caveat on title to the Suburb C property on 12 October 2018, though such caveat could only affect the husband’s interest in the Suburb C property.
During his cross examination the husband revealed that he had owned Equipment 3 in early 2018 for use on the farm business and the same was sold for $55,000 with the proceeds of sale being deposited into the “farm transaction account”. At the same time, the husband also owned Equipment 4 that was sold for between $25,000 and $30,000. The sale funds of Equipment 4 were also deposited into the “farm transaction account”. The husband gave evidence in his cross examination that he similarly sold Equipment 1 for $15,000 and $8,800. He paid the proceeds into the OO Company account ending #...56.
Further, during his cross examination, the husband gave evidence that he sold Motor Vehicle 4 about six weeks prior to the commencement of the final hearing for $9,000 on an online sales website. Those funds were paid by bank transfer into the husband’s Complete Access account ending #...59. The husband gave evidence that in about April 2018 he sold Equipment 2 for $9,000 and paid that sum into the “farm transaction account”. He also sold a “[piece of equipment] from the farm” to a neighbour for $4,400, which was paid into the OO Company account.
The husband also gave evidence that during 2018 he sold a tractor for $22,000 or $23,000 and that the proceeds of sale were paid, to the best of his recollection, into the “farm transaction account”. On or about 31 January 2019 the husband sold a chaser bin or grouper bin from the Town F property for $2,310 and deposited the proceeds into the bank account ending #...59.
The husband admitted during his cross examination in October 2019 that he had made incorrect, deceptive statements on OO Company’s website, and then confirmed during his cross examination in March 2021 that he had not corrected those statements on the site.
The parties separated on 5 September 2017 when the husband left the matrimonial home following an incident between himself and one of the children. The wife and the children remained residing in the Suburb C property. Until October 2018 the children spent some time with the husband supervised and then commenced spending one night per fortnight and one afternoon each alternate weekend from after school until 6:30PM with the husband. During school holidays the children were in the husband’s care for short periods of consecutive days and overnights.
The final parenting orders made by consent on 3 March 2021 provided for the parties to have equal shared parental responsibility for the children. The orders provided for the children to live with the wife and spend time with the husband as agreed between the parties in writing and failing agreement as below:
(a)During school term time, in week one from 9:00AM on Saturday until 6:30PM on Sunday, and in week two from the conclusion of school on Wednesday until 7:00PM;
(b)During school holidays in week one from 9:00AM on Friday until 6:30PM on Monday and in week two from 9:00AM on Wednesday until 6:30PM that day; and
(c)Orders were made for the children to spend time with each parent on the special occasions of Christmas, New Year, Easter, Father’s Day and Mother’s Day.
Pursuant to these orders, where the children, or any child, are unwilling to spend time with the husband, the children or child are excused from attending such time.
An agreed fact between the parties noted in the orders of 14 June 2022 is that since 8 January 2022 the children have exercised their right pursuant to the orders of 3 March 2021 not to spend time with the husband.
Following separation, the husband continued to meet the loan account payments on all the accounts secured on both the Suburb C property and the Town F property, but eventually fell into arrears in relation to all of those accounts in about March 2018.
In addition to the parties’ joint debt to J Pty Ltd and the husband’s debt to K Limited, at separation the husband also had debts relating to the conduct of the farm business on the Town F property to SS Company for $15,513 and to TT Company for $10,098.
In February 2019, K Limited as plaintiff filed a statement of claim in the District Court of New South Wales with the husband as defendant seeking recovery of the debt of $164,770.76.
On 30 May 2019, N Law Firm who had previously acted for the husband in the proceedings until March 2019, filed a statement of claim in the Local Court of New South Wales in relation to unpaid legal fees of $34,531.74.
On 10 July 2019, judgment was entered against the husband in the K Limited proceedings for a judgement debt of $174,460.20.
By 19 June 2019, the husband was indebted to the CBA in relation to the various accounts relating to the purchase of the Town F property, guaranteed by the wife and cross secured on the Suburb C property, in the sum of $1,354,509.60. The debt was composed of five loans:
(a)A Business Loan owing $789,567.51;
(b)A second Business Loan owing $534,504.37;
(c)An Equipment Finance loan owing $14,291.20;
(d)A second Equipment Finance loan owing $11,217.81; and
(e)An unsecured facility owing $4,928.71.
At about this time the bank instructed solicitors to take proceedings to realise the security so as to recover their loans, but after negotiations the bank agreed to give the husband time to enter into a Put and Call Deed for the sale of the Town F property and to enter into a Deed of Forbearance with the husband. A proposed Put and Call Deed relating to the possible sale of the Town F property by the husband to Mr & Mrs T, neighbours to the Town F property, did not proceed and the husband was unable to enter into the Deed of Forbearance with the CBA.
In December 2019, the husband was served with a bankruptcy notice issued at the request of K Limited. During the period in early 2020 when K Limited could otherwise have proceeded to lodgement of a creditor’s petition against the husband to render him bankrupt, the bankruptcies moratorium consequent upon the COVID-19 pandemic prevented that occurring.
In consequence of the husband’s lease of the Town F property to Mr & Mrs T he had received lease payments from them of:
(a)$120,000 on 17 April 2018, paid into the OO Company account ending #...56;
(b)$80,000 in four quarterly payments of $20,000 ($22,000 with GST) each during 2019; and
(c)A further $60,000 by quarterly payments during 2020, a total of approximately $260,000 excluding GST.
The husband applied the first payment of $120,000 towards: the reduction of the arrears owing on the loan accounts secured on the properties by $26,321, payment out of the TT Company debt of $10,098, and the payment out of the SS Company debt of $15,513. The husband asserts the balance of $68,068 was expended on “some nominal farm expenses” and “ongoing mortgage and interest expenses”.
On 5 May 2020, the husband withdrew $10,000 from his Super Fund 2, leaving a preserved benefit balance remaining of $127,139.41. On a later occasion he withdrew a further $10,000 from that fund. None of those funds were paid over to the wife.
On 2 February 2021, the husband lodged an application for litigation funding with EE Trust, and on 3 February 2021 entered into a contract with EE Trust pursuant to which they lent him $147,143.31 – $120,000 plus interest and charges – by way of litigation funding to enable him to pay legal fees related these proceedings, at an interest rate of 5% per annum. Under that contract, the husband granted to EE Trust a charge over his interest in the Suburb C property. This action by the husband was contrary to order 7 of the orders made on 6 August 2020 following the interim hearing on 29 April 2020, that restrained the husband by injunction from:
Transferring, assigning, leasing, encumbering or alienating any asset in which he has an interest except with the prior written consent of the wife and upon providing the wife with 14 days notice in writing and only in compliance with these orders; and [from] entering into or incurring any further debt.
The husband subsequently filed an Application in a Case on 24 February 2021 seeking an order varying order 7 of the orders of 6 August 2020 to enable him to borrow:
Up to $120,000 plus interest and charges from [EE Trust] or any other such amount as deemed appropriate by the Court) for the sole purpose of funding his legal costs of these proceedings, and to permit the lodgement of a caveat over his interest in the former matrimonial home at [B Street, Suburb C] in the State of New South Wales by [EE Trust] to secure the said loan.
That interim order was made by the Court on 26 February 2021, with the costs of both parties relating to that application being reserved.
The husband was cross examined by Mr Coleman SC about his litigation funding arrangement with EE Trust on 3 February 2021 in breach of the order of 6 August 2020 and he asserted, over and over again, that though he was aware of the order, he thought that it only related to commercial lending for the farm business purposes. In reviewing carefully the whole of that part of the husband’s cross examination, I do not accept his assertions in that regard.
The orders of 6 August 2020 also required that the husband was to “forthwith direct 50% of the lease payments for the [Town F] Farm to the wife”, which the husband did not do, despite receiving a payment of $22,000 (inclusive of GST) on 23 October 2020 as a rental payment under the lease of the Town F property to the Mr & Mrs T.
In 2021 the Town F property sold for around $1,700,000. Contracts had been exchanged in late 2020 and the purchasers were the Mr & Mrs T, who had previously leased the Town F property. After payment of agent commission and other proper costs of sale, the proceeds of sale were applied to repayment of debt as follows:
(a)$1,422,329.98 to the CBA and repayment of the two Business Loans in the husband’s name;
(b)An overdraft account in the husband’s name and a credit card in the husband’s name, all of which had been secured on the Town F property;
(c)$211,335.72 to ZZ Law Firm in relation to the K Limited debt in the husband’s name, being $174,460.20 repayment of the primary debt and interest and $17,665.78 in legal costs; and
(d)$25,906.16 to J Pty Ltd in relation to the parties’ joint debt, which left a balance of the debt outstanding of $32,935.
Since mid-April 2019 the wife has made such principal and interest payments on the loans secured on the Suburb C property relating to its purchase (not cross secured relating to the Town F property purchase) and all the rates and other outgoings in relation to that property. The wife was able to make those payments from her own resources from April until July, but thereafter needed assistance by way of loans from members of her family, and in particular her brother and her father. The wife gave evidence during cross examination that both loans are repayable.
In 2020 the wife sought to take advantage of a moratorium on repayments on the loan accounts secured on the Suburb C property due to the COVID-19 pandemic, but on request the husband refused to assist the wife in that regard.
The wife also gave evidence in her Financial Statement at item 53 that she owes $186,812 to her parents for monies borrowed by her to pay legal fees for these proceedings.
The wife’s individual tax return for 2018 indicates that the wife’s taxable income for that year was $47,100.[7] The wife’s individual tax return for 2020 indicates that the wife’s taxable income for that year was $55,209.[8]
[7] Exhibit R10.
[8] The tax return is part of Exhibit A32.
The wife asserts in her evidence that she was subjected to a consistent pattern of family violence by being a witness to physical violence perpetrated by the husband to the children, verbal abuse of her and coercive and controlling conduct on the part of the husband. The wife asserts that such family violence affected her contributions of a financial and non-financial nature as homemaker and parent, and that that conduct had a significantly adverse impact on those contributions or made those contributions significantly more arduous than they ought to have been. This part of the evidence goes to what is commonly referred to as a ‘Kennon claim’ by the wife, as discussed when reviewing the relevant law later in these Reasons.
The wife asserted that the husband was physically abusive and aggressive towards the children “in the form of pushing and shoving, hair pulling, pinching, kicking and pulling.” She asserts that incidents of such physical abuse of the children occurred on a weekly basis after 2016 and occurred about once per month before then. In paragraph 64 of her trial affidavit, the wife gives detail of some such incidents throughout the second half of 2016 and throughout 2017 up until separation. In paragraph 70 of the wife’s trial affidavit she refers to the photographs in annexure K-17 depicting what she asserts were bruises on the children caused by the husband.
In paragraph 183 of his trial affidavit the husband says:
I acknowledge that in the past, including during the marriage, that there have been incidents where I have engaged in physical discipline of the children and I have accepted full responsibility for my conduct. Whilst I do not intend to minimise what occurred, I do say that these incidents occurred during a period of 18 months in which I was ending work, suffering from financial and emotional pressure.
The husband provides response to the specific events asserted by the wife in paragraph 187 of his trial affidavit.
In relation to family violence perpetrated by the husband against the wife, the wife asserted in paragraph 19 of her statement for police of 10 November 2017 that is annexure K-18 to her trial affidavit that:
At no time has [Mr Kalgreen] been physically abusive towards me. He has however been increasingly emotionally and psychologically abusing me. He constantly says that I am overreacting and making things up. I feel scared that he will continue to hurt children and want him to leave our family home so that we can be safe.
The husband says in paragraph 190 of his trial affidavit:
At times in 2016 and 2017 [Ms Kalgreen] an [sic] I had some verbal confrontations, most notably stemming from my discipline of the children above. However, I deny that I have been abusive or intimidating to [Ms Kalgreen] and the confrontations have been mutual in their intensity and language used towards one another.
During his cross examination the husband denied that he was ever controlling in his behaviour toward the wife and denied that he was ever coercive toward the wife in a non-physical way. He did admit that there were occasions when he used excessive physical force disciplining the children and that on occasions the wife would be protective of the children when this occurred.[9] He admitted during cross examination to an occasion when he hit Z and caused her bruising when she was five years of age.
[9] Transcript 2 March 2021, page 125.
As a result of the wife’s statement to police, a provisional Apprehended Domestic Violence Order (‘ADVO’) was issued by an authorised police officer in late 2017 containing the statutory provision and an order that the husband must not live at the same address as the wife and any of the children. A final ADVO was made in the Local Court at Suburb AB in late 2017 for 12 months in the same terms.
The wife relies upon the evidence of Ms GG, a registered psychologist, contained in Ms GG’s affidavit, sworn or affirmed 22 September 2019. Ms GG gives her expert qualifications and I accept her as an expert. Annexure “C” to her affidavit is a report dated 6 September 2019 provided at the request of the solicitors acting for the wife and previous short reports dated 5 September 2013, 15 March 2018 and 6 July 2018.
The wife began attending with Ms GG in January 2013 to obtain assistance with “managing her stress and strengthening her emotional well-being so as to prevent a possible relapse of PND.” The reports in March and July 2018 refer to the wife’s presenting problems as “stress in exile related to family separation in September 2017” and “history of DV directed towards the children (save you and [Z])”, rephrased in the July 2018 report as “stress reactive to complex marriage and family breakup” and “history of DV with physical abuse from father to children.” In the July 2018 report Ms GG noted that the mother’s depressive score was “still within normal ranges”.
The report of 6 September 2019 referred to appointments with the wife on 15 December 2015 and 10 February 2016 with the wife seeking support “due to experiencing an escalation of stress and anxiety symptoms”. The wife expressed herself as open to exploring couples counselling to explore issues within the marriage, but that the husband was not open to such help. The main part of the report related to therapy for the wife with Ms GG between September 2017, when the parties separated, and August 2018. The wife’s presenting need at the first appointment on 13 September 2017 was “to access support and seek professional opinion regarding concerns she held about her husband’s alleged long-term aggressive behaviours towards their children”. The wife “reported that she had been experiencing high levels of anxiety directly in relation to the issue of her husband’s aggression towards the children…[she] also reported feeling guilt that she had not reported her concerns earlier.”
There is nothing in the report to support an assertion that the husband’s conduct towards the children affected her contributions of a financial and non-financial nature and as homemaker and parent by that conduct having a significantly adverse impact on those contributions or making those contributions significantly more arduous than they ought to have been.
The wife relies upon the evidence of Dr FF, a clinical psychologist, in her affidavit undated at the jurat but asserted to have been sworn on 2 September 2019 in the annexure notes. Dr FF gives her expert qualifications and I accept her as an expert. Annexure “C” to her affidavit is a report dated 26 August 2019 provided at the request of the solicitors acting for the wife and which includes her reports of 12 October 2018, 7 June 2019 and 10 July 2019. The reports were entered into evidence after redaction that obviated the need to consider objections by Counsel for the husband.
The wife consulted Dr FF between 14 August 2018 and 21 August 2019 and had 24 sessions of psychological therapy during that time. The three earlier reports do not support a contention that the wife’s contributions were made significantly more arduous than they would otherwise have been to the degree that would justify the husband’s conduct being taken into account in the overall assessment of the parties’ contributions.
Dr FF’s report of 26 August 2019 stated that the purpose of the wife’s treatment was to assist with difficulties she encountered, being a heightened sense of fear and psychological stress, when dealing with the husband directly or communicating with him after separation. The wife’s treatment was specifically for symptoms of post-traumatic stress disorder. The report makes clear that it is the wife’s participation in these proceedings with the husband, and the interactions between them that the proceedings necessitate, that had caused the wife to seek a referral for the therapy. Dr FF notes that in the absence of any necessity to communicate with the husband or attending Court, the wife “has experienced an almost complete remission of symptoms in the absence of the circumstances.” Dr FF also noted that:
In spite of these intermittent symptoms, [Ms Kalgreen] has maintained a high level of functioning throughout the course of treatment, continuing to run her own business while providing the majority of the care for the three children. At no time has there been any indication to me that [Ms Kalgreen]’s symptoms have impeded her ability to care for the children.
I find that this report does not support a contention that the wife’s contributions were made significantly more arduous than they would otherwise have been to the degree that would justify the husband’s conduct being taken into account in the overall assessment of the parties’ contributions.
Despite her evidence about her ongoing therapy with Dr FF, the wife deposes in paragraph 122 of her trial affidavit that she and the husband “are in good health”.
By consent, the parties agreed certain facts reflected in the orders made on 14 June 2022 and accordingly pursuant to section 191 of the Evidence Act 1995 (Cth), evidence is not required to prove these agreed facts, nor may evidence be adduced to contradict or qualify as agreed facts:
(a)The Suburb C property is valued at $3,800,000 in accordance with the valuation report of the joint expert Mr KK of OO Company dated 10 December 2021;
(b)The mortgage secured against the Suburb C property with CBA was in arrears as at 22 April 2022 in a sum of $4,207 and the wife was paying the arrears pursuant to an agreement with the CBA;
(c)The council rates for the Suburb C property were in arrears of $4,935.18 as at 5 April 2022. The wife has not been ordered to pay the council rates but she has reached an agreement with the council to pay the arrears by instalments;
(d)From 8 January 2022 to 14 June 2022, the children have exercised their right pursuant to order 3 of the final parenting orders made 3 March 2021 not to spend time with the husband;
(e)Pursuant to the Child Support Assessment dated 21 February 2022 annexed to the orders, as at that date the amount of child support payable by the husband to the wife for the children was $765.50 per month for the period 8 January 2022 to 30 June 2022;
(f)On 23 April 2021 a contract of employment was served by the husband’s lawyers on the wife’s lawyers indicating that the husband’s then income was $147,825 per annum inclusive of superannuation;
(g)Notwithstanding the husband’s employment contract, the Child Support Assessment attached to the orders was based on a provisional income for the husband of $57,852, and the wife’s income per her 2020 income tax return of $55,209;
(h)The wife has lodged all of her income tax returns with the Australian Tax Office (“the ATO”) except her 2021 return which is not due to be lodged until May 2022;
(i)The husband was in arrears under the child support assessment in the sum of $221.99 as at 13 April 2022;
(j)The wife has caused to be paid, as and when they fall due, 25% of the school fees for Z at AA School at Suburb O pursuant to the orders made by consent on 23 May 2018, 50% of the school fees for X at U School, Suburb V and 50% of the school fees for Y at W School, Suburb V;
(k)The husband was in arrears in his obligations for the repayment of 75% of the school fees for Z at AA School at Suburb O being $6,086.05 pursuant to the orders made on 23 May 2018, for one half of the payment of the school fees for X at U School Suburb V being $8,124 and $1,965 for Y at W School Suburb V, being a total sum of $16,175.05 as at 13 April 2022;
(l)In or around March 2022, the parties each paid half of the fee being a total of $3,000 for Z to take a placement at W School to commence in Year 5; and
(m)The husband has not lodged his 2018, 2019, 2020 and 2021 income tax returns with the ATO.
The husband was in paid employment from the commencement of cohabitation until being made redundant from his position with WW Company in 2008. The husband was out of paid employment for about three months and was then again in paid employment until 2014 when he resigned from his employment with the YY Company and began conducting his own business through his corporate vehicle, OO Company. From 2009 when he purchased the first tranche of the Town F property he conducted a business by farming the property and spent, on his own evidence, considerable amounts of time, especially at weekends, at and travelling to and from the Town F property. This left the wife with sole care of the children for those periods of time.
The husband's taxable income reduced considerably following his leaving paid employment in December 2014, but he had made a decision to pursue his own business both through OO Company and by farming the Town F property. The wife asserted that she opposed both ventures, voicing her opposition to the first of the Town F property purchases but keeping silent thereafter in relation to oppositions.
I find that the evidence in the matter does not amount to establishing a circumstance where the husband acted recklessly, negligently or wantonly in pursuing the business himself, and that in doing so he did not embark on a course of conduct designed to reduce or minimise effective value or worth of the matrimonial assets. I find that the husband made his best efforts and that the business on the Town F property was ultimately hampered by climatic conditions. This is the luck of the farming ‘draw’.
The wife was in paid employment at the time of cohabitation and remained so until 2007 when she left work for the birth of X. Following a year of maternity leave, the wife returned to work part-time until 2009 when she again took maternity leave for about a year for the birth of Y. The wife returned to work again on a part-time basis until 2010 when she left work to run her own business. She continued to run her corporate vehicle, G Company, at the time of hearing. In that regard, I accept the evidence of the wife that she commenced the business through G Company in 2010 and not 2008 as asserted by the husband.
I find that the parties contributed the whole of their earnings during cohabitation to the acquisition, conservation and improvement of their property, individual and joint, and towards the welfare of the family unit by way of payment of families living expenses. The greater overall financial contribution through cohabitation was made by the husband through his superior earnings.
In relation to the parenting of the children, I find that the wife was primarily responsible from their time of the birth for the day-to-day care of the children and most particularly, from about 2009 when the husband began to absent himself from the family home for periods of time, particularly weekends, to attend to the business on the Town F property.
I find that the parties made about equal overall contributions to the homemaker role in relation to such household duties as cooking, cleaning, washing, ironing and shopping until about 2009 when the husband purchased the Town F property. Thereafter, they each made contributions to the homemaker role, but that the wife's contribution was greater than that of the husband due to her constant availability in that regard and his frequent absences.
When considering the morass of evidence on final hearing relating to:
(a)The receipt of monies by the husband from various sources and his expenditure of same on a mixture of loan repayments other debt maintenance and for his own purposes;
(b)The husband’s cessation of payments toward the loan accounts secured on the Suburb C property relating to its purchase from and including April 2018;
(c)The wife's payment of those loan accounts secured on the Suburb C property thereafter, with the assistance of monies borrowed from family members; and
(d)The evidence in the husband's cross examination and the agreed facts in the orders of 14 June 2022 about child support and payment of school fees;
I find that the parties’ post-separation financial contributions slightly favour the wife.
At the time of separation on 5 September 2017, X was 10 years of age, Y was 8 years of age and Z was 4 years of age.
The wife has been virtually the sole carer as between the parties for the children since the time of separation, and it is in evidence as an agreed fact between the parties under section 191 of the Evidence Act 1995 (Cth) in the orders by consent of 14 June 2022 that the children have not spent any time with the husband since 8 January 2022. I find on the basis of the wife's contribution as parent that the wife made significantly greater post-separation contribution as between the parties.
As I have already indicated earlier in these Reasons, I do not find on all of the evidence that the husband's conduct in perpetrating family violence on the children of the marriage and the wife's role as intervener and protector for the children on those occasions so affected the wife's contributions of any nature so as to make those contributions significantly more arduous than they ought otherwise to have been to the extent that it affects the assessment of the overall contributions of the parties on the holistic basis. That is not to say that the husband's improper conduct in that regard did not have an effect on the wife and the children and the family as a whole – it must have – or that the wife's role as parent was not made more difficult to a degree then it would have been absent such conduct by the husband.
I accept that the husband's conduct did make the wife's parenting role on those occasions more difficult than it would have been absent such conduct by the husband, but I do not find that the frequency of such events as found in the evidence amounts to a factor to be considered in the assessment of contributions.
The cogently reasoned submissions on behalf of the wife asserting that on the whole of the evidence, the Court would find that the husband had committed wastage, both during cohabitation and following separation, will be considered under the Court’s assessment of whether or not there should be any adjustment between the parties under section 75(2) of the Act.
On the whole of the evidence and on the holistic basis, I find that the contributions of the parties from commencement of cohabitation until the final hearing favour the wife as to 52% and the husband as to 48%. That finding on assessing contributions relates to both the available assets and the superannuation entitlements of the parties.
Should there be any adjustment between the parties in consequence of matters referred to in section 79(4)(d) to (g) of the Act?
At the end of the final hearing the wife was 47 years of age and in good health and the husband was 51 years of age and good health.
It is an agreed fact in the consent orders of 14 June 2022 that the husband has entered into employment with AD Ltd as a professional with an income of $147,825 per annum inclusive of superannuation. That renders obsolete the husband's evidence in his Financial Statement of 23 October 2019 as to income, as does the sale of the Town F property to Mr & Mrs T as the husband is no longer in receipt of lease payments from them. In reality, the husband's income asserted in that Financial Statement, as it was at that time, and husband's income per the agreed fact are almost the same being a $4,600 difference. The husband is physically and mentally capable of engaging in appropriate gainful employment.
The wife's Financial Statement of 22 October 2019 indicates that her income at that time was derived from her conduct of business through G Company and receipt of Centrelink benefits by way of Family Assistance Part A and B, giving her a weekly income of $1,446, or an annual income of about $75,000.
At the time of completing that Financial Statement, the wife was entitled to receive child support payments from the husband for the children of $32 per week, and was not receiving those payments. The consent orders of 14 June 2020 provide the agreed fact between the parties that as at the time of those orders, the husband was assessed to pay $176.05 per week to the wife as child support and that such assessment was based on an adjusted taxable income of the husband of $57,825, whereas by that time the husband's annual income was, per the agreed fact, $147,825 inclusive of superannuation. This should have led ultimately to a revised assessment and a much increased weekly rate of child support payable by the husband.
The wife is physically and mentally capable of engaging appropriate gainful employment and continues to do so through the G Company business conducted by her.
There is significant disparity in the income of the parties. Pursuant to section 75(2)(o), the Court can take note of the significant disparity in the earning capacity of the parties. The Court can also take note of the duration of the marriage and the periods of time that the wife was on maternity leave or engaged in employment on a part-time basis due to the birth of each of the children. This has necessarily had a negative effect on her earning capacity by reducing her opportunities to gain experience in both employment and business, below the opportunities available through that time to the husband.
I find that the disparity in the parties’ income and earning capacity favours an adjustment in favour of the wife.
The wife has exclusive day-to-day care and control of the children who, at the end of the final hearing were aged 15 years, 13 years and 11 years. She will continue to have exclusive day-to-day care and control of the children as between the parties until each child attains 18 years of age.
The commitments of the husband necessary to enable him to support himself are set out in Part G of his Financial Statement and total $3,233 per week. However, this includes expenditure that related to the Town F property of $1,571 per week and loan repayments on an overdraft account with Commonwealth Bank that ceased on the sale of the Town F property. The husband stated in item 31 that as at 23 October 2019, he was not paying any child support for the children of the marriage. However, I have reviewed the reality of the child support circumstances at the time of the agreed facts in the consent orders 14 June 2022 above.
The commitments of the wife necessary to support herself and each of the children of the marriage are stated as at 22 October 2019 in her Financial Statement filed that day and in Part G thereof are estimated at $2,046 per week. This is a sum well in excess of her asserted income.
I find that there is a necessary disparity in the commitments of the parties as the husband's commitments are only necessary to support himself, whilst the wife's commitments are necessary for the support of herself and the three children of the marriage, continuing until each child attains 18 years of age and possibly thereafter, depending on engagement in tertiary education.
On that basis, I find that the commitments of each of the parties necessary to enable each party to support him and herself and children of the marriage that each party has a duty to maintain favours an adjustment in favour of the wife.
On the evidence neither party is responsible for the support of any other person other than their statutory duty to maintain and support the children of the marriage.
There is no evidence that the husband is eligible for, or receives any, pension allowance or benefit under the law of the Commonwealth, of a State or Territory or of any other country or under any superannuation fund or scheme. The wife states in her Financial Statement that she is in receipt of Family Assistance Part A and B from the Commonwealth in a sum of $319 per week. Any increase in payment of child support by the husband to the wife above the nil reflected in the Financial Statements would have an effect on the amount of Family Assistance received by the wife once a certain point is passed.
Given the income of the husband is reflected in the agreed facts, it is likely that he will be able to enjoy a standard of living commensurate with that he enjoyed during the parties’ cohabitation. The income and earning capacity of the wife would indicate that she is unlikely to enjoy a living standard commensurate with that she enjoyed during the parties’ cohabitation.
The orders proposed by the husband would ensure that all of the creditors of the parties recover their debts. The orders proposed by the wife would also provide for the creditors of the parties to recover their debts, doubly so if the wife is unable to achieve refinance and any payment out of the husband, and retain the Suburb C property.
During the parties' cohabitation the wife contributed to the income and earning capacity of the husband in that he was enabled to maintain full-time employment and then full-time attention to his business interests through his corporate vehicle whilst the wife had periods out of employment during maternity leave and was in part-time employment. The wife was primarily responsible as between the parties for the day-to-day care and control of the children of the marriage thereby freeing the husband to gain his maximum available work and business experience and so improve his value in the employment marketplace. However, to base any part of an adjustment between the parties in favour of the wife on this consideration would, in my view, be to conflate this consideration with the assessment of contributions and I therefore do not find that this consideration favours any such adjustment.
The wife continues in her role as full-time parent of the children as between the parties and in considering the need to protect the wife in that role by providing a sufficient capital base to enable her to maintain the role in a satisfactory manner, I favour in adjustment in favour of the wife.
On the evidence to the conclusion of the final hearing neither party is cohabiting with any other person.
Though the evidence supports the finding that the husband's record in relation to payment of child support was very bad up until the agreed facts in the consent orders 14 June 2022, at that time it was an agreed fact that the husband's arrears of child support were $221.99 as at 13 April 2022.
Under section 75(2)(o) the Court is to consider any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account in the assessment of whether or not there should be any adjustment between the parties of the percentage findings and contributions.
I find that the arguments presented for the wife in written submissions that the husband was guilty of wastage are not made out. On the evidence, the husband at no time embarked upon a course of conduct designed to reduce or minimise the effective value or worth the matrimonial assets or acted recklessly, negligently or wantonly with matrimonial assets so as to reduce or minimise their value. The husband embarked on the farming business at the Town F property in the hope of building their business as a worthwhile income source for the family unit. That he was not ultimately successful was not due to any conduct on his part of the kind referred to above.
In relation to both the purchase of the Town F property by the husband and the conduct that business, I find that the consequent financial losses should be shared between the parties in the same manner as any financial gains that may have resulted would have been shared between them.
I also reject the argument put strenuously on behalf of the husband in written submissions that the wife was guilty of waste through her persistent refusal to agree to a sale of the Suburb C property in circumstances where it was never clear that she would be in a financial position to retain the property in final orders. I do not find that such refusal to agree to a sale of that property was reckless, negligent or wantonly unreasonable given the nature of the case argued before the Court on her behalf on final hearing where, if successful, addbacks to a value of nearly $700,000 would have been placed on the husband's side of the "ledger" in altering the interests of the parties in the property. Moreover, considering the husband's superannuation entitlements in circumstances where a superannuation splitting order is not sought by either party, could have brought the Suburb C property within the wife's reach.
Should there be any adjustment in favour of the wife in consequence of the monies received by the husband from various sources post-separation and referred to as addbacks in the Balance Sheet put before the Court by the parties as an attachment to the written submissions of the wife?
The Husband's evidence in chief and his response to certain "setting questions" during his cross examination by Senior Counsel for the wife was that he applied all of the monies from the following sources towards loan payments, rates, taxation, farm costs, and his own personal expenses classified as "loan to [Mr Kalgreen]". However, it is clear from the cross examination of the husband that not all of the monies received by him from the various sources under consideration – monies withdrawn from the home loan, the CBA overdraft, the lease payments from the Mr & Mrs T for the Town F property, the sale of farm plant equipment and the sale of YY Company shares – were applied to expenditures for the maintenance of the value of the parties’ property or for the welfare of the family unit. A significant sum was either retained by, or expended by, the husband for his own purposes. Of course, "his own purposes" includes his necessary and unavoidable living expenses and such expenditure does not ground a finding that there should be an adjustment in favour of the wife. But certainly, the husband's cross examination and the whole of the evidence does justify a finding that the husband has been advantaged by some of those monies received by him post-separation to the exclusion of the wife, and that circumstances does ground an adjustment in favour of the wife.
I find that the husband's withdrawal from superannuation of $20,000 was expended on his living expenses during the difficult financial times consequent upon the COVID-19 pandemic and will not be taken into account as favouring any adjustment between the parties.
Similarly, the arrears of rates for the Town F property at the time of its sale and the husband's incurring of the K Limited debt will not be taken into account. The husband incurred the K Limited debt in pursuing the agribusiness on the Town F property and my findings earlier in these Reasons provide the rationale for considering the husband's incurring that debt as reasonable in all the circumstances.
I apply the same reasoning to the penalties incurred by the husband on default of payments on the H Business loans on the basis that he either did not have the financial resources to make the payments, and so incurred the penalties, or if he did have the financial resources to meet the payments in consequence of the monies received by him post-separation as listed in paragraph 257 above, then to consider a further adjustment between the parties on that basis would lead to a double count in consequence of the finding that I made in paragraph 257.
I do not consider that any order made in accordance with those sought by the parties or underground anywhere between them would have any detrimental effect upon the earning capacity of either the parties to the marriage.
On the basis of my findings in considering the matters referred to in section 79(4)(d) to (g), including the relevant matters in section 75(2), I find that there should be an adjustment of 15% in favour of the wife. That 15% equates to $592,326, or a differential of $1,184,652.
Accordingly, I find that it is just and equitable that orders be made altering the interests of the parties in the property as to 67% thereof to the wife and 33% thereof to the husband.
CONCLUSION – WHAT ORDERS ARE JUST AND EQUITABLE?
I find that it is appropriate in this matter to deal with the available assets, affected by the liabilities and the parties' superannuation entitlements, on a global or ‘one pool’ approach.
Neither party seeks a superannuation splitting order.
The wife seeks that she be given an opportunity to retain the Suburb C property and pay the husband such sum as results in the Court’s findings on the appropriate alteration of interests of the parties in the property, with the husband to pay his own legal costs and the loans relating to his legal costs from his share and the wife to pay her legal costs and the loans relating to her legal costs from her share. The wife's orders do not deal with the repayment of the parties’ joint debt to J Pty Ltd in the event of either the wife retaining the Suburb C property or that property being sold, and they do deal with the wife being solely responsible as between the parties for repayment of her debt to her brother.
The husband's orders propose an immediate sale of the Suburb C property with the machinery orders being the same as those made on 11 September 2019 relating to a sale of the Town F property, and for the proceeds of sale to be applied to:
(a)The costs of sale;
(b)The repayment of the loan account secured by mortgage on the Suburb C property; and
(c)The repayment of the parties’ joint liability to J Pty Ltd;
Thereafter, the husband proposes a division of the remaining proceeds of sale equally between the parties.
The husband proposes to discharge his liabilities to N Law Firm, RR Law Firm and EE Trust from his share of the proceeds. The husband proposes that the parties otherwise retain the property that they currently own to the exclusion of the other, and the parties be otherwise solely liable as against the other party for their debts.
In the event that orders are made that:
(a)The husband transfer to the wife his interest in the Suburb C property;
(b)The husband retain his Motor Vehicle 1 valued at $25,000;
(c)The husband retain his legal fees paid of $36,116 and his superannuation entitlements with a combined value of $377,966;
(d)The wife retain G Company valued at $2,665;
(e)The wife retain her superannuation entitlement with a value of $140,946;
(f)The wife be solely responsible as between the parties for repayment of the Commonwealth Bank loan accounts secured on the Suburb C property at $376,695;
(g)The wife repay her debt to her brother of $24,220; and
(h)The wife repay the parties’ joint debt to J Pty Ltd of $32,935;
Then the wife would have net property valued at $3,509,761 and the husband would have net property valued at $439,082.
The net value of the property after allowing for the liabilities is $3,948,843. A division by altering the interests of the parties in the property as to 67% percent to the wife and 33% to the husband would give the wife a net figure of $2,645,724.80 and the husband a net figure of $1,303,118.20.
Accordingly, if orders were made that provide for the wife to retain the Suburb C property, an order would be made for the wife to pay to the husband $864,036.20. When added to the other liabilities for which the wife would be responsible, the wife would need to obtain finance in a sum of $1,297,886.20. There is no demonstrated ability in the evidence of the wife being capable of obtaining and maintaining borrowing to that extent.
I find that it is just and equitable that orders be made altering the interests of the parties in the property by:
(a)Providing for a sale of the Suburb C property with the loan account secured by mortgage on the Suburb C property and the parties’ joint debt to J Pty Ltd being paid from the proceeds of sale together with all legal and other proper costs of sale including any agent's commission; and
(b)The remaining proceeds of sale being then divided between the parties so as to achieve an overall division between them of 67% to the wife and 33% to the husband when the husband has prior to such division net assets to a value of $439,082 (his Motor Vehicle 1 valued at $25,000 and his combined superannuation entitlements of $377,966) and the wife has net assets to a value of $119,391 (G Company valued at $2,665 and her superannuation entitlements valued at $140,946, less the wife's debt to her brother of $24,220).
I will make orders for the sale in accordance with the Husband’s minute.
In the minute of agreed facts, the parties set out a series of debts that are in arrears as at particular dates:
(1)The Husband being in arrears of child support in the sum of $221.99 as at 13 April 2022; and
(2)The Husband being arrears of school fees for the children in relation to various schools in the sum total of $16,175.05 as at 13 April 2022.
In her application before the Court, the Wife seeks that certain of the monies payable to the Husband be directed by him to pay out these and other debts owed by him, including:
(1)Any amount payable to her under a costs order;
(2)His contribution to the costs of the ICL;
(3)His arears of child support; and
(4)His arears to the schools.
I consider that it is appropriate to direct the payment of the Husband’s monies as according to 2 to 4 of the paragraph above.
Accordingly, I make the orders as set out at the commencement of these Reasons.
I certify that the preceding two hundred and seventy-seven (277) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Morley. Associate:
Dated: 23 March 2023
0
16
4