Kauser and Kauser

FEDERAL CIRCUIT COURT OF AUSTRALIA

KAUSER & KAUSER

[2015] FCCA 1686

Catchwords:
FAMILY LAW – Property division – contributions – lack of disclosure of financial resources – financial losses during the relationship.

Legislation:

Family Law Act 1975, ss.75 & 79

Stanford & Stanford (2012) FLC 93-518
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Re In the marriage of Weir (1993) FLC 92-338

Applicant:

MS KAUSER

Respondent:

MR KAUSER

File Number:

ADC 404 of 2014

Judgment of:

Judge Cole

Hearing dates:

8 and 9 April 2015

Date of Last Submission:

9 April 2015

Delivered at:

Adelaide

Delivered on:

25 June 2015

REPRESENTATION

Counsel for the Applicant:

Mr P Heinrich

Solicitors for the Applicant:

Treloar & Treloar

Respondent:

Self-represented

ORDERS

That the husband pay to the wife the sum of ONE HUNDRED AND TWENTY-FOUR THOUSAND, FIVE HUNDRED AND FIFTY DOLLARS ($124,550.00) within twenty-eight (28) days.
That within twenty-eight (28) days the husband do all such things and take all such steps as are necessary to discharge the mortgage currently held in the wife’s name.
That within twenty-eight (28) days the husband do all such things and take all such steps as are necessary to pay and/or discharge the wife from any liability for any outgoings in respect of the properties and the property being (omitted) being the whole of the land comprised and described in Certificate of Title Register Book Volume (omitted) Folio (omitted) known as the Property W farm (“the farm”) including council rates and SA water.
In the event of the husband complying with paragraphs 1, 2 and 3 of these orders, the wife contemporaneously with the payment of the sum of ONE HUNDRED AND TWENTY-FOUR THOUSAND, FIVE HUNDRED AND FIFTY DOLLARS ($124,550.00) and the discharge of the mortgage and any associated liabilities, council rates etc in respect of the properties and the farm, transfer her right, title and interest in the properties and the farm to the husband, with the husband to indemnify the wife and keep her indemnified in respect of all liabilities and outgoings thereon.
In the event of paragraphs 1, 2, 3 and 4 not being complied with, the properties situated at Property R, Property C1 and Property C2 in the State of South Australia (“the properties”) be sold.
That the net proceeds of sale of the properties be disbursed as follows:
(a)In payment of the sum of ONE HUNDRED AND TWENTY-FOUR THOUSAND, FIVE HUNDRED AND FIFTY DOLLARS ($124,550.00) to the wife; and
(b)In payment of the remainder to the husband.
In the event of the husband failing to comply with paragraphs 1 to 3 hereof:
(a)the Property W farm together with the plant and equipment and/or remaining stock be placed on the market for sale forthwith on such terms and conditions as nominated by the wife;
(b)the husband within twenty-eight (28) days of vacate the farm;
(c)the wife be appointed trustee for the sale of the farm;
(d)the proceeds of sale of the farm and the properties be applied in discharge of the debt with (omitted) Bank, the costs associated with the sale of the farm and the properties, and in respect of any outstanding rates or taxes on the farm and the properties; and
(e)The remaining proceeds of sale of the farm and the properties be disbursed as follows:
(i)In payment of such sum to the wife as is required to provide her with a total sum (allowing for any money that may be received from the sale of the properties) ONE HUNDRED AND TWENTY-FOUR THOUSAND, FIVE HUNDRED AND FIFTY DOLLARS ($124,550.00),
(ii)In payment of the remainder to the husband.
The husband deliver up to the wife her personal possessions including those items listed in the attached Schedule “A” and such other items as are agreed.
All outstanding applications do otherwise stand dismissed.
Liberty to apply as to consequential orders.

IT IS NOTED that publication of this judgment under the pseudonym Kauser & Kauser is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

Schedule A

LOUNGE

(omitted) copper platter on wall
(omitted) clay
(omitted) clay
Books ((omitted) history)
Grandfather’s pocket watch
Duck from (omitted)
(omitted) gold spoons
(omitted) glasses
Other glasses
Tablecloths
Materials
Grandma’s two crocheted bed spreads
Mother’s and Dad’s old song books
(omitted) novels (6-7)
MS KAUSER’S OFFICE

One book shelf
One bed
One mattress
Two gold rings from mother
One gold necklace from mother
Other jewellery
Christmas decorations
Green stone lamp
Iron table
Clothes
Half of the hides (sheep, goat, kangaroo)
MR KAUSER’S OFFICE
Natuzzi leather corner sofa
Pictures – photo albums
Picture in frame of parents’ farm in (omitted) (aerial)
Green restored metal suitcase (trunk)
Items in trunk
HALLWAY
Books on bookshelf (Author (omitted))
Large hand sewn tapestry by mother
Items in wooden trunk
Items in (omitted) (trunk)
STONEHOUSE
Bag of Lego Duplo
Boxes of kids toys
Hat stand (clown)
Heaters/fans (to be shared)
Chairs
OUTSIDE MAIN HOUSE
Goat head
Dining table and chairs
KITCHEN
Plates
Cups
Glasses
Platters
Bowls
LAUNDRY
Apron for pegs – hand stitched by mother

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 404 of 2014

MS KAUSER

Applicant

And

MR KAUSER

Respondent

REASONS FOR JUDGMENT

The Proceedings

This is the application of the wife for a division of the matrimonial assets.
The proceedings were instituted in February 2014. The wife has been represented throughout. The husband despite being advised repeatedly that he should seek legal representation has chosen to represent himself. Unfortunately he has not done well.
The proceedings have been marked by the husband’s failure to comply with Court orders, and his truculent attitude when appearing in Court.
The wife in August 2014 sought leave to proceed on an undefended basis, which was eventually abandoned on the first day of trial when she took, as counsel put it, a pragmatic approach to concluding the proceedings.
The trial proceeded on 8 and 9 April 2015, concluding with closing addresses on the last day.
The wife seeks a division of the assets on the basis that she receives 60% with the husband to receive 40%.
The husband’s proposal is more complex in that he seeks orders that include:
a)The Property W farm and the Property C1 property transferred to him;
b)The properties at Property R and Property C2 be divided between the parties (after payment of $15,000 to the husband);
c)The wife bear the loss of $103,000 being the loss incurred in share trading;
d)The wife pay to the husband $28,824; and the parties each take one half of the mortgage ($304,000).
The husband’s proposal in effect means that the liabilities assumed by the wife will be more than the assets retained by her.

The evidence

The wife relies on:
a)her application filed on 6 February 2014;
b)her trial affidavit filed on 10 February 2015;
c)her Financial Statement filed on 10 February 2015;
d)the affidavit of Mr R filed on 10 February 2015; and
e)the affidavit of Mr G filed on 10 February 2015.
Orders had been made for the filing of trial documents on 2 December 2014. The husband was present when those orders were made.
Those orders required the parties to file their trial affidavits on or before 10 February 2015 together with their updated financial statements.
The husband filed an affidavit on 6 February 2015. It was unclear as to whether that purported to be a trial affidavit. A further affidavit was filed on 20 February 2015 and again it was unclear as to whether this constituted a trial affidavit.
The matter came before me on 12 March 2015. It became apparent that the husband had not filed his trial affidavits in accordance with the orders made. In any event, another matter was proceeding with priority that day. The proceedings were accordingly adjourned to 8 and 9 April 2015 for hearing. The husband then filed two affidavits on 25 March 2015 together with a financial statement.
At the commencement of trial on 8 April 2015 after some discussion with the husband, and noting the objections of the wife’s counsel to the numerous documents filed by the husband, it was determined that he was relying on:
a)his response filed on 27 May 2014;
b)his affidavit filed on 6 February 2014;
c)his affidavit filed on 20 February 2014;
d)one of his affidavits filed on 25 March 2015, noting that following submissions I ruled that the other document filed 25 March 2015was a direct response to the case outline filed by the wife and was regarded as a case outline for the purposes of these proceedings; and
e)his updated financial statement filed on 25 March 2015.
The husband and the wife gave evidence and were cross-examined.
Whilst the husband disputed the expertise of Mr G, he elected not to call him to be cross examined and conceded that Mr G’s evidence would probably be as set out in his affidavit. The affidavit of Mr G was therefore admitted into evidence.

Chronology

The husband was born on (omitted) 1950 and will be aged 65 this December. This has some relevance when considering amongst other things, his entitlement to an age pension and a possible pension from (country omitted).
The wife was born on (omitted) 1955 and turned 60 this year.
The husband arrived in Australia from (country omitted) in 2004. The parties commenced cohabiting in (omitted) 2004 and married on (omitted) 2004.
Both parties had been married before, the husband having three children in (country omitted) aged 18, 16 and 16. The wife has four daughters from her first marriage aged 32, 30, 27 and 25.
There is no dispute that at the commencement of cohabitation the wife had nominal assets whilst the husband had the proceeds of the sale of his farm in (country omitted).
A number of properties were purchased by the parties in the name of the wife as follows:
a)on (omitted) 2004 the Property W farm was purchased for $267,500;
b)on (omitted) 2004 the property at Property C1 was purchased for $87,500;
c)on (omitted) 2005 the property at Property C2 was purchased for $128,700; and
d)on (omitted) 2006 the property at Property R was purchased for $96,500.
The farming property does not appear to have been profitable throughout the history of this matter.
The wife’s evidence is the parties sought to improve their financial situation by way of share trading. The husband asked his mother for funds. The husband’s oral evidence was she then got a reverse mortgage on her house and from that provided the sum of $100,000 to the parties.
The money was placed into a (omitted) Bank account and utilised by the parties for the purposes of share trading. There is no dispute that the wife oversaw these transactions. While the share trading venture was operating prior to the global financial crisis it apparently made a reasonable income however in or about 2007, the parties lost all of their money.
The wife alleges that the funds were advanced as early inheritance to the husband. The husband says it is a debt that is due and owing to his mother.
The husband’s mother is aged 94. There is no evidence in respect of the loan save for a handwritten note annexed to one of the husband’s affidavits. There is no evidence in respect of her health nor is there any evidence in respect of her testamentary intention.
In 2010 the wife qualified as a (omitted) through study at TAFE.
On 2 July 2013 the parties separated when the wife left the farm property and moved to Adelaide.
I will refer to the orders made in these proceedings and the husband’s failure to comply with them when considering his evidence.

Common ground

At the commencement of cohabitation it is agreed that the wife had nominal assets whilst the husband had approximately $800,000 (the wife’s evidence is $796,700) Australian from the proceeds of the sale of his (country omitted) property.
The parties agreed that the husband would purchase the properties referred to above and place them in the name of the wife. The wife’s evidence is that this was done to assist the husband to avoid any demand from the (country omitted) tax department and any possible child support claim arising from his first marriage. This was conceded by the husband.
There is no dispute that there is a mortgage secured against the properties to the (omitted) Bank which currently has an outstanding amount of some $304,000. The mortgage is in the name of the wife.
The husband has since the date of separation remained residing on the farm. The wife resides in rented premises.
The husband is occupied in farming work running a small herd of cattle and a (omitted) business. In addition, he continues to run his (omitted) business called (name omitted) which is involved in (business omitted). The husband has provided little if any information in respect of this business or the income received from it.
The wife is employed as a (occupation omitted) for (employer omitted). Her evidence that she works between 57 and 68 hours per fortnight was not disputed. She works mainly in the (employer omitted) at (omitted).

Husband

It is appropriate at this stage to say something about the husband’s attitude towards these proceedings and his compliance with the orders of this court.
On each occasion that the husband has appeared in court his behaviour has been difficult. He has been advised on a number of occasions to seek independent legal advice and has on more than one occasion informed the Court that no lawyer would act for him even on the basis of being paid at the conclusion of the proceedings.
I have difficulty with this submission. The husband does not present as a man who is incapable of handling his affairs. He would argue that due to his contributions, the parties were able to successfully run three rental properties that were managed by him. He has elected however to ignore the suggestions made by this Court and has not helped his case in any way.
In addition, he has wilfully ignored Court orders to disclose amongst other things the statements for his bank account on the basis that they are his private business.
When this matter first came before me an order was made on 14 April 2014, that the husband file his responding documents within 21 days. He failed to do so. The matter came before me on 27 May 2014 and an order was made for the husband to file his responding documents on or before 3 June 2014. They were filed on 27 May 2014.
Orders however had to be made on 9 July 2014 that he serve a copy of his response and financial statement within 7 days as he neglected to provide a copy to the wife’s solicitors.
Orders were also made that the husband pay to the (omitted) Bank from the income he received from the rental properties such payments as are required in respect of the loan secured by mortgage against the properties. It is questionable as to whether he has complied with this order at all. It is evident from his evidence that he gave higher priority to reimbursing himself for his efforts rather than paying the mortgage instalments.
An order was also made that by no later than 13 June 2014 that he provide the wife’s solicitors with full details of all funds received by him since 2 July 2013 with respect to the properties and the names and contact details of all tenants who occupy the properties. He failed to comply properly with this order.
An order was made that by 13 June 2014 the husband make discovery of all documents in his possession or power in respect of the rental properties. He failed to do so.
On 9 July 2014, interim orders were made permitting the wife to sell the properties. They remain on the market.
On 8 August 2014 the husband failed to appear in Court. On 14 August 2014 the husband failed to attend the conciliation conference. The husband attended the adjourned conciliation conference on 15 September 2014.
On 30 September 2014 the matter was listed for trial on 12 March 2015 and further time was provided for the respondent to serve a copy of his response and financial statement and a copy of his disclosure.
On 2 December 2014, comprehensive trial directions were provided.
In the course of his evidence by way of example, the husband conceded amongst other things:
a)that he had not given a list of documents in his possession;
b)he had not disclosed any invoices in respect of his (omitted) business, although he conceded he wrote invoices for the business when he considered it appropriate;
c)he had not disclosed a BAS statement for the (business omitted) or the farming business (he brushed this off as being the job with the accountant who was not particularly quick);
d)he knew he was required to provide his bank statements but he did not because it was his private account;
e)he did not provide any details of the rent money received save for stating that he had received a total amount of approximately $16,450 of which he had paid $1,534.55 toward the mortgage payment. No particulars or accounting was provided;
f)His best evidence was that he used the rent money for the cost of maintenance on the properties and to pay himself at the rate of $35 per hour for the work he had done on the properties;
g)He had not disclosed a sum of $5,000 that he had received from the insurer for the farm in respect of storm damage when the roof came off a shed. He had banked that cheque into his account and subsequently withdrawn that amount in cash which he kept in a cash box on the farm. That amount was not disclosed in his sworn financial statement because he considered that the cash amount was spoken for in respect of the repairs that needed to be done to the shed (although it appeared that the damage had occurred in early 2014 and no work had been done by the time of trial in April 2015);
h)He had banked two cheques made out to doctors attended by the wife, received from Medicare, in his account. He was unapologetic about this and stated he had banked them because she, the wife, had previously banked a cheque of his in her account although it was unclear as to what he was referring to;
i)That despite living on and using the farm he had not paid the Council rates because the wife would not call him to discuss matters; and
j)That despite having previously sworn that the parties shared equally in domestic chores, he now was of the view that he had provided the major work in that area.
His evidence was such that it is open to me and I would find that he has not been forthcoming in respect of his financial circumstances.
The disclosure that he still had $5,000 in cash in a cash tin on the farm, combined with the other matters referred to above, including the fact that he had used the strategy of placing the property in the wife’s name to avoid possible tax consequences from the (country omitted) government and child support obligations give me little or no confidence in the evidence provided by him.
He did not seem to appreciate the consequences of his actions. He was completely unrepentant and remained adamant that his version of the property settlement was the fair and proper way to go.

Wife

The wife cannot escape criticism. Her agreement to have the properties placed in her name and all business matters handled in her name, raises the issue of her being complicit in the husband’s efforts to avoid his obligations.
She is very clear that at the commencement of cohabitation the husband had $796,700 that he had brought with him from (country omitted) being the proceeds of the sale of his (country omitted) farm.
The wife notes that “the husband wished to protect his assets from claims for child support and by the (country omitted) taxation office, he requested that the property be registered in my name”.[1] Clearly she allowed him to do that.
[1] See wife’s trial affidavit filed on 10 February 2015, 19(a).

She has however since the commencement of these proceedings engaged with the Court process and attempted to move this matter to a resolution.
It is unfortunate that the husband, having placed the properties in the name of his wife, then sought to ignore the legal ramifications of such a step which required the wife to seek interim orders in respect of the sale of the three residential properties, amongst other things.

The Valuation evidence

Orders were made on 2 December 2014 that in the event of the parties failing to reach agreement in respect to the valuation of any asset the parties joining in obtaining and facilitating the valuation of any sense asset on or before 23 January 2015.
Agreement was not reached in respect of the value of the properties and accordingly Mr G was instructed to undertake a valuation of the three residential premises being Property C2, Property C1, Property R, the farming property at Property W and the farming plant, equipment and livestock on that property.
An affidavit was filed by Mr G with this Court on 10 February 2015.
No alternative valuation was supplied by the husband. He raised a number of objections to the valuation report of Mr G however conceded that in the absence of any other evidence he had to accept the values provided.
Mr G was not required for cross examination by Mr Kauser. Care was taken to explain to Mr Kauser that if he did not challenge the report or produce any alternative evidence, then the report of Mr G was the only available evidence for the Court. I consider that this was understood by Mr Kauser, and he elected to proceed without calling the valuer.
It should be noted that the affidavit of Mr G discloses that:
a)He contacted Mr Kauser at 8:20am on 24 December and requested his assistance to inspect the farm. His request was refused, the husband advising that he did not want the property valued, and that he would not assist.
b)He then conducted a roadside valuation of the property, having been denied permission to enter upon and inspect the farming property, livestock, plant and equipment.
c)He was able to inspect the rental properties.
Mr Kauser’s evidence was that he referred Mr G to the wife’s solicitors. His position was it was their job to organise the valuation. It is open to me to consider his behaviour to be obstructive and I consider his evidence in respect of this issue is unacceptable.
Mr G valued the properties as follows:
a)Property W farm at $360,000;
b)Property R $140,000;
c)Property C2 $50,000; and
d)Property C1 $130,000.
As this is the best evidence available, and it is uncontested, I accept the valuations provided by Mr G and would include them when considering the identity and value of the matrimonial asset pool.

The law

The High Court recently had cause to revisit the provisions of Part VIII of the Family Law Act 1975 (“the Act”) and in particular the operation of s.79, in respect of the division of the matrimonial assets in the matter of Stanford (2012) FLC 93-518.
The majority of the Court stated:
a)in every case in which a property settlement order under s.79 is sought, it is necessary to satisfy the Court that, in all the circumstances, it is just and equitable to make the order;[2]
b)it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying according to the ordinary common-law and equitable principles, the existing legal and equable interests of the parties in the property;[3]
c)because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is just and equitable to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist;[4]
d)whether making a property settlement order is just and equitable is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in the marital property which is fixed by reference to the various matters set out s.79(4);[5] and
e)in many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as a result of the choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of the property by the husband and wife.[6]
[2] Stanford (2012) FLC 93-518, 35.
[3] Ibid, 37.
[4] Ibid, 39.
[5] Ibid, 40.
[6] Ibid, 42.
Neither party submits that it is not just and equitable that I make an order for the division of the assets. The husband has made the primary financial contribution and the assets of significance are registered in the wife’s name.
In any event, I consider this matter fits within the parameters of those cases referred to by the High Court in Stanford.[7]
[7] Ibid, 42.
In determining what orders should be made for the division of the matrimonial assets, I would adopt the approach set out in the matter of Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 that involves four inter-related steps, namely to:
a)identify and value the property, liabilities and financial resources of the parties at the date of the hearing (“the asset pool”);
b)identify and assess the contributions of the parties within the meaning of s.79(4)(a), (b) and (c) of the Family Law Act 1975 (“the Act”), and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties (“the contributions”);
c)identify and assess the relevant matters referred to in s.79(4)(d), (e), (f) and (g), including the matters referred to in s.75(2) of the Act so far as they are relevant and determine the adjustment (if any) that should be made to the contributions-based entitlements the parties established at step two (“financial resources and needs”); and
d)consider the effect of these findings and determination and resolve what order is just and equitable in all the circumstances of the case.[8]
[8] Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener)(2003) FLC 93-143, 39.

The pool

The wife has set out a comprehensive schedule of what she submits are the assets and liabilities of the parties. She has in respect of the real estate adopted the values of Mr G and I accept this. I do not accept all of the values of the other assets as proposed by the wife and where there is a difference (for reasons as set out below) I have noted the wife’s figure in brackets. In the event of the item being excluded I have not included it in the table.
Mr Kauser did not present any evidence of significance in respect of the value of the matrimonial asset pool. He attributed values to the properties in one of the affidavits that he sought to rely on however provided no corroborating evidence, nor did he provide any acceptable reason for ignoring the Court order that in the event of any property being in dispute the parties obtained a sworn valuation at their joint expense.
As set out above, the husband elected not to cross examine Mr G and conceded that this was the only evidence the court had available in respect of the value of those assets. I therefore accept the values attributed to the real estate.
With respect to the remaining assets, the husband did not provide, despite a number of requests, any documentation to corroborate the numbers of stock that may be on the farm. His best evidence was that the numbers fluctuated depending on the sales.
The wife seeks to include as an add-back, a sum of $257 being the total of cheques that she says were misappropriated by the husband being refunds from Medicare.
The husband concedes that he banked these cheques into his account. How he managed to do this when the cheque was made out to his wife is not clear. It may be that further investigations may be undertaken by other authorities. The money he says was applied to general living expenses and costs of maintaining the property. There is no evidence to refute this and in the circumstances I do not propose to add that back to the pool.
No significant objection was raised in respect of the value of the Ford utility and the trailer in his possession and I therefore accept those values.
With respect to the cattle, Mr G suggests a value of $500 per head be applied to the cows. He notes at the conclusion of his report that “approximately 3 cows were observed being hand fed close to the stockyards. These cattle appeared to be in poor condition, and it is the valuers opinion that a value of $500 a head be applied to the cows”.
I am conscious of the fact that he was denied entrance to the property. I am also conscious of the fact that Mr Kauser has not supplied any documentation or discovery that would show the number of cattle held by him on the farm.
The evidence of the wife is that as at the date of separation there were approximately 40 head of cattle on the farm. In view of his failure to supply what I consider to be basic information in a property settlement dispute, I consider I am entitled to draw an inference that those cattle are either still on the farm or in the alternative have been sold by Mr Kauser and the funds applied for his purposes.
The Full Court in Re In the marriage of Weir (1993) FLC 92-338 states:
It seems to us that once it has been established that there has been a deliberate non disclosure, which follows from his Honour's findings in this case, then the court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.
At the same time I note the tax returns filed by Ms Kauser. The 2013 financial statement shows a value attributed to the cattle of $1,271.97 as of 30 June 2013. This discrepancy is not explained by the wife. In view of the fact that a limited number of cattle were sighted, and the figures shown in the tax return, I propose to bring the cattle to account in the sum of $2,000.
There is no evidence in respect to the value of either party as to furniture and effects. Agreement of sorts was reached in respect of the items requested by the wife. Orders will be made in respect of that at the conclusion of these Reasons.
With respect to the wife’s motor vehicle, a Ford motor vehicle, I accept the value proposed by her of $1,000.
With respect to the liabilities there was no significant dispute in respect of the value of the (omitted) Bank mortgage, the council rates, SA Water and the emergency services levy. Mr Kauser did argue that these debts should be met by the wife. I do not accept his submission.
With respect to the costs of selling the real estate, it is the argument of the husband that there should be no order for the sale of the farm.
The three properties are being sold however and the fourth may have to be sold, I consider it appropriate to bring that cost to account.
There was no significant dispute in respect of the value attributed for the wife’s interest in the (omitted) superannuation fund.
The husband argued that the wife had incurred a significant loss on the sale of the goat herd.
The wife’s evidence is that at the time separation she arranged for the goats (which she had cared for) to be taken to the property of her friend Ms M who had offered to look after them. She subsequently offered the wife $3,300 inclusive of GST for them. The wife accepted that offer and used those funds for her living expenses while she was looking for employment after separation when she had moved to Adelaide.[9]
[9] See wife’s trial affidavit filed on 10 February 2015, 50.
The husband argues that the goats could have been sold for at least the purchase price of over $13,000 and that this loss should be brought to account. He does not provide any evidence to support this claim.
I accept the wife’s evidence in respect of this issue (including the fact that the goat herd did not make a profit whilst the parties were running the business on their property) and decline any submission that the amount should be added back.
The wife also states that there were approximately 100 hens on the property at the time of separation. No value is attributed to this and in the circumstances; I do not consider that can be bought to account. The figure appeared to come from the depreciation schedule on the tax returns annexed to the wife’s affidavit.
The wife seeks to bring to account the farm plant and equipment the sum shown in the depreciation schedule $15,800. What was not addressed in her evidence is the fact that that amount included the Ford, the trailer, the utility and fencing. If those amounts are deducted, the end of year written down value for those items remaining is approximately $5,838. I would bring that amount to account. I appreciate it is the value shown on the depreciation schedule however it is the best evidence available to me.
I would therefore adopt the figures set out under the wife’s column as the value of the matrimonial assets and liabilities.

Item	Husband’s value	Wife’s value
Property W farm	$360,000
Property R	$140,000
Property C2	$50,000
Property C1	$130,000
Ford utility	$8,000	$8,000
(omitted) trailer	$1,000	$1,000
Cattle	Not agreed	$2,000 (W says $15,000)
Farm plant and equipment	Not agreed	$5,838 (W says $15,838)
Furniture and effects (H)	Nominal
Furniture and effects (W)	Nominal
Wife’s motor vehicle	$1,000
Liabilities
(omitted) Bank mortgage	$304,000
Wife’s credit card	$1,720
Council rates	$11,111
SA water	$719
Emergency services Levy	$573
Estimated costs of selling real estate	$20,000
Superannuation
(omitted) (wife)	$3,186

Contributions

There is no dispute that the husband had $796,700 which he brought with him from (country omitted) having sold his farm there.[10]
[10] See wife’s trial affidavit filed on 10 February 2015, 17.
The wife had nominal assets.
I have previously noted that the husband’s funds were used to:
a)purchase the Property W farm on (omitted) 2004;
b)purchase Property C1 on (omitted) 2004;
c)purchase Property C2 on (omitted) 2005; and
d)purchase Property R on (omitted) 2006.
Counsel for the wife submits that the total gross price of the properties amounted to $580,200. He submits that the properties were purchased with the assistance of funds from (omitted) Bank. He further says that there is no evidence as to how the remaining funds were used. Implicit in that submission is a suggestion that the husband may have not disclosed other assets.
It is appropriate to take account of the fact that plant and equipment would have needed to have been purchased for the property. The farm would have needed to have been stocked, and that all of the capital came from the husband.
The parties ran a cattle herd, a poultry farm and a goat herd on the property.
More importantly however it is appropriate to take account of the fact that the farm did not appear to make a profit throughout the period of the relationship. The wife’s evidence was that the parties made little or no profit with the cattle, goats or cropping. Only the poultry made a profit. The parties’ income was supplemented by work the husband undertook in his business (omitted) and share dividends.
The wife’s evidence is that in an effort to supplement the parties’ income, they obtained funds ($100,000) from the husband’s mother which they invested in share trading. They were able to supplement their income from the share trading until the global financial crisis. As a consequence they lost all of their money.
She says the money was an advance on the husband’s inheritance. There is no dispute that the funds were raised by the husband’s mother by way of a reverse mortgage. The husband says that the funds were advanced by way of the loan. He further says that the loss incurred by the parties should be attributed solely to the wife.
Counsel for the wife submits that the sum of $100,000 received from the husband’s mother should be ignored. His submission is that the funds were invested and there is now nothing left and therefore it cannot be brought to account.
This ignores his client’s concession that until the global financial crisis, the parties were able to obtain an income from the share trading. That income in the face of the losses from the general farming operations assisted the parties with their day to day expenses.
I accept that both parties worked on the property on the various ventures they undertook including the poultry business, the goat herd, and the cattle herd, during the period of their relationship. I note the wife’s evidence that she planted trees with the husband, helped fence the property, and assisted in the building of the shed for the goats. In addition, her evidence is that she was primarily responsible for domestic duties.
I note that the wife toward the conclusion of the relationship obtained employment and funds received from that work were used toward meeting the regular expenses, including the payment of rates and other outgoings on the property, to the best of her ability.
I accept that the wife in allowing all assets to be placed in her name and agreeing to a loan secured against those assets being placed in her name made a contribution in that respect. I have previously commented on the motivation behind that arrangement which has gone to my view of the wife’s credibility.
I accept the submission of the wife’s counsel that following the parties’ separation, the husband continued to occupy the farm and continued to receive the rents for the properties that were in the wife’s name. I further accept that he applied those funds to such expenses as he considered fit including his daily living expenses.
I cannot ignore however the fact that the available assets are there due to the husband’s initial financial contribution. In addition, I consider the assistance received from his mother and the use of the income from the share trading to have contributed towards the maintenance and upkeep of those assets.
In the circumstances, I consider the contributions of the parties toward the asset pool as set out above be such that it be 80% in favour of the husband with 20% to the wife.

Financial resources and needs

The husband was born on (omitted) 1950 and will be aged 65 (omitted) this year. There is no suggestion that he has any health issues.
The wife was born on (omitted) 1955 is aged 60 this year. The wife’s evidence is that she is not visited the dentist for three years, has a broken front tooth which requires dental work, and may have other dental work that needs to be undertaken.
She also needs a new prescription for her glasses but otherwise she does not refer to any other serious health complaint.
The husband continues to occupy the farm and attend to the farming operations. He also receives an income from his (omitted) business however the amount of that income has not been disclosed by him and his answers to questions concerning the business were vague and evasive. I am entitled to and I do draw an inference that he receives some income from that business.
In addition, the husband concedes he may have an entitlement to a pension from the (country omitted) government when he turns 65 this year. He advises that he owes the (country omitted) government a lot of money although he does not provide any evidence of this alleged debt.
For the reasons set out above, I am not satisfied that the husband has disclosed all of his income, property and financial resources. Counsel for the wife made the point that the purchase price for the properties was approximately $520,000 and yet the parties have a mortgage of $300,000. In other words, of the sum of approximately $800,000 held by the husband at the commencement of cohabitation, approximately $600,000 remains unaccounted for.

I have for reasons set out above, noted that some of those funds would have been utilised to set up the farm including stocking the property, buying plant and equipment, and general maintenance. I cannot however exclude the fact that the husband has additional assets that he has failed to declare for reasons known only to him. I note in particular, the husband’s refusal to disclose his bank statements on the basis that he considered that to be his private business.
The wife is employed as a (occupation omitted) working in the (employer omitted) at (omitted). She continues to receive an income in respect of her employment from when she meets her weekly expenses.
The wife’s evidence is that her Mitsubishi motor vehicle is in poor condition and she will need to purchase a new vehicle soon.
Neither party appears to have the responsibility for caring for another.
The commitments of the parties are set out in their financial statements filed with this Court. It is clear that the parties have lived frugally over the period of the cohabitation because there was not a lot of income.
The wife has been able to retrain during the period of the marriage and obtain employment. This is proved to be of significant assistance to her.
In considering any other fact or circumstance, I return to my previous comments regarding the husband’s failure to engage in these proceedings in a timely and appropriate manner. The wife’s counsel submits that the wife has incurred counsel fees of some $15,812.90 which when combined with her solicitor’s costs amount to $50,881.84.
The wife’s counsel submits that I can either make an order for costs in respect of this matter or in the alternative, bring this to account when considering the financial resources and needs the parties, pursuant to s.75(2)(o) of the Act.
I consider it appropriate to bring it to account when considering the financial resources and needs the parties.
Having regard to all of the factors set out above, I consider it appropriate to make an adjustment in the wife’s favour of 15%.
This would mean that the matrimonial assets referred to above should be divided such that the wife receive 35% that the husband to receive 65% of the net value of the matrimonial asset pool.

Review

I found the pool to comprise the following:

Item	Wife’s value
Property W farm	$360,000
Property R	$140,000
Property C2	$50,000
Property C1	$130,000
Ford utility	$8,000
(omitted) trailer	$1,000
Cattle	$2,000E
Farm plant and equipment	$5,838
Furniture and effects (H)	Nominal
Furniture and effects (W)	Nominal
Wife’s motor vehicle	$1,000
Subtotal	$697,838
Liabilities
(omitted) Bank mortgage	$304,000
Wife’s credit card	$1,720
Council rates	$11,111
SA water	$719
Emergency services Levy	$573
Estimated costs of selling real estate	$20,000
Subtotal	$338,123
Net	$359,715
Superannuation
(omitted) (wife)	$3,186
Net	$362,901

The wife would be retaining:
a)Her motor vehicle $1,000
b)her credit card ($1,720)
c)her superannuation $3,186.
Subtotal $2,466
35% of the net pool equates to $127,015.35. Deducting the assets held by the wife, then she would be entitled to receive an amount of $124,549.35. I would round that up to $124,550.
This would mean that the wife would have $124,550, plus assets in her possession worth $2,466.
The husband would have assets with a net value $362,901 less the net value of the assets taken by the wife of $2,466 being $360,435 from which he would pay the wife a sum of $124,550 leaving him with $235,885. Meaning he would retain 65% of the net value of the assets.
The wife has had to struggle to have this matter proceed to trial. This has been because the husband has not engaged or assisted in the process of litigation in any proper and constructive way.
I am concerned that should there be an order for the sale of the remaining property, namely the farm, then the wife would again have to go through the process of enforcing that order. Whilst she would receive some compensation in respect of the costs, it would still mean that she would be involved in a long and arduous process. I would therefore give the husband the option of buying the wife out. I am not prepared however to extend that any longer than is commercially necessary. He is either in a position to pay her or he will have to vacate the property.
Pursuant to orders made on 9 July 2014, the three rental properties were listed for sale. No offers had been received as at the date of the trial.
Neither party suggests that the properties are likely to sell quickly.
In the event that they do not sell in the foreseeable future I see no cause for the wife to wait for her portion of the net value of the assets.
I did suggest that the wife may wish to have one of the rental properties so that she had control over an asset. That was not acceptable to her.
Nevertheless it is still open to either party to “purchase” the properties in such a manner as to ensure that the wife receives her entitlement and the orders are complied with.
I would therefore order that the husband pay that sum to the wife within 28 days and to discharge the wife from any liabilities that may be outstanding including (omitted) Bank, and the council rates in exchange for the wife transferring her interest in the assets to the husband.
In the event of that occurring, then it would be up to the husband as to whether or not he wishes to continue to keep all three residential properties on the market.
Should he not be able to raise the funds, then I do not consider it appropriate he remain on the farm particularly when regard is had to his conduct to date. In default of him paying I consider it appropriate that he have 28 days within which to vacate the property. The wife in default of payment can have liberty to list the farming property for sale, and within 28 days of the listing can have the vacant possession of the property, to ensure there is no obstruction to the sale process.
The husband has through his conduct, placed the parties in a position where the intervention of the bank is highly likely. In those circumstances the wife having control of the sale process, is I consider the more favourable outcome, pending any intervention by the bank.
I do not consider it appropriate that the husband have the right of veto on the sale taking into account his attitude during the course of these proceedings, including but not limited to his refusal to allow Mr G to come on the property for the purposes of obtaining a valuation. Furthermore, I consider it appropriate for the reasons set out above that the wife’s entitlement be fixed.
There will be costs associated with the sale of the property however I anticipate this will be deducted prior to the net proceeds being distributed.
In the event of the wife receiving part of her entitlement from the sale of the properties, (although I suspect the proceeds may be taken by the bank) then the remaining amount can be paid from the farm proceeds.

Conclusion

This is a matter where the greater financial contribution to the acquisition of the assets has been made by the husband.
The parties have been engaged in a farming operation that has essentially been a loss-making enterprise for the period of the relationship.
The husband has from the date of separation until orders were made by this Court had control of the assets. His efforts to maintain the properties are questionable and he has resisted attempts to sell the assets.
To obtain sufficient income to make ends meet the wife has retrained and has now obtained employment. The husband continues to operate the farm and it continues on all available figures to make a loss.
The husband has taken an obstructive approach to these proceedings and the wife has had to undertake extraordinary steps to get this matter to a trial.
The proposals put forward by the husband are not acceptable and not warranted on the basis of the above findings.
In the circumstances I consider the above division of the assets to be just and equitable and make the orders set out at the commencement of these Reasons.

I certify that the preceding one hundred and fifty seven (157) paragraphs are a true copy of the reasons for judgment of Judge Cole

Date: 24 June 2015

[2015] FCCA 1686

25 June 2015

Key Legal Topics

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Family Law

Property Law

Equity & Trusts

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Injunction

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