Konitza and Konitza

[2009] FamCAFC 171

FAMILY COURT OF AUSTRALIA

KONITZA & KONITZA [2009] FamCAFC 171

FAMILY LAW - PROPERTY SETTLEMENT - APPEAL AGAINST REFUSAL OF WIFE’S APPLICATION TO RECEIVE EQUAL CONTRIBUTION BASED ENTITLEMENT – HUSBAND’S CROSS APPEAL AGAINST MONIES ADDED BACK TO THE MATRIMONIAL ASSET POOL AND DOUBLE COUNTING OF ASSETS - APPEAL FROM FAMILY COURT – DISCRETION - APPLICATION OF LAW - Wife deceased prior to determination of proceedings - Not established that trial Judge erred in concluding that the husband’s advance of funds to an adult daughter should be added back to pool of assets available for distribution between the parties - Not established that trial Judge erred in the exercise of her discretion by declining to add back the value of land transferred to an adult grandson to pool of assets available for distribution between the parties - Not established that trial Judge gave insufficient weight to the content and context of the wife’s contribution as homemaker and parent within the terms of section 79(4)(c) of the Family Law Act 1975 (Cth) - Not established that trial Judge failed to consider and apply the provisions of Section 79(8) (b)(ii) - Established that trial Judge erred in her quantification of the asset pool, and that her discretion miscarried - Held that trial Judge failed to give any or adequate weight to wife’s indirect contribution in post separation period - Appeal and cross-appeal adjourned

Family Law Act 1975 (Cth); Section 75(2); Section 79(8)

A v J (1995) FLC 92-619
Allesch v Maunz (2000) 203 CLR 172
Bennett and Bennett (1991) FLC 92-191
C and C [1998] FamCA 143
De Winter and De Winter (1979) FLC 90-605
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Tasmanian Trustees Limited (Administrators of Estate of Gleeson) v Gleeson (1990) FLC 92-156

APPELLANT/CROSS-RESPONDENT: G KONITZA as Legal Personal Representative of Mrs KONITZA (Deceased)

RESPONDENT/CROSS-APPELLANT: Mr KONITZA

FILE NUMBER: PTW 3281 of 2006

APPEAL NUMBER: WA 10 of 2009

DATE DELIVERED: 16 September 2009

PLACE DELIVERED: Parramatta

PLACE HEARD: Perth

JUDGMENT OF: Bryant CJ, Coleman & May JJ

HEARING DATE: 30 June 2009

LOWER COURT JURISDICTION: Family Court of Western Australia

LOWER COURT JUDGMENT DATE: 8 May 2009

LOWER COURT MNC: [2009] FCWA 55

REPRESENTATION

COUNSEL FOR THE APPELLANT: Dr Ingleby with Mr Davies

SOLICITOR FOR THE APPELLANT: O’Sullivan Davies

COUNSEL FOR THE RESPONDENT: Mr Dowding SC with Ms Taylor

SOLICITOR FOR THE RESPONDENT: Carr & Co.

Orders

1. That the further hearing of the appeal be adjourned.

2. That within 21 days, each party file and serve any further evidence intended to be relied upon in support of the re-exercise of the trial Judge’s discretion.

3. That within 21 days each party file and serve submissions in relation to:

   (a)Whether the Full Court should re-exercise the trial Judge’s discretion or remit the proceedings for re-hearing by a judge other than the trial Judge.

   (b)The orders which should be made in lieu of the orders of the trial Judge in the event of the Full Court re-exercising the trial Judge’s discretion.

4. That within 28 days any submissions in response to the submissions referred to in the preceding order be filed and served.

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

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WA 10 of 2009
File Number: PTW 3281 of 2006

G Konitza as Legal Personal Representative of Mrs Konitza (Deceased)

Appellant/Cross-Respondent

And

Mr Konitza

Respondent/Cross-Appellant

REASONS FOR JUDGMENT

1. As will become apparent, this appeal and the trial from which it originated involved a most unusual set of facts. First the wife died after the commencement of proceedings but before the hearing and the parties’ grandson (as legal personal representative of the wife) has conducted the litigation against the husband who is himself 99 years of age. Secondly, although the parties were married for 72 years they only cohabited for two periods totalling 13 years. The first was in Albania from 1934-1946 and the second in Australia for one year in 1993-1994. Thirdly the circumstances of the husband leaving Albania after the war, in fear of his life, and where some of his actions thereafter resulted in the wife and children being treated as enemies of the people and held in various forms of imprisonment between 1946 and 1990. Through this period the wife maintained and nurtured the children entirely on her own and without any contact, let alone support, from the husband.

2. Unsurprisingly at trial (and to some degree before us) the unique facts of this case evoked some strong submissions, particularly from Counsel for the wife, about the weight to be given to the nature of the wife’s contributions as a parent in extraordinary circumstances versus the husband’s financial contribution. It is also evoked strong submissions about future needs (where one party has died and where the other is 99 and has thus a short life expectancy).

3. By Amended Notice of Appeal filed 19 June 2009 G Konitza as Legal Personal Representative of Mrs Konitza (Deceased) (“the wife”) appealed against orders made by Martin J on 8 May 2009. Those proceedings were for settlement of property between Mr Konitza (“the husband”) and the legal personal representative of the wife. For convenience, we will throughout our Reasons for Judgment refer to the husband and wife, notwithstanding that the wife died in January 2008, prior to the commencement of the hearing before the trial Judge, and that her legal personal representative has at all material times represented the deceased wife in the proceedings in this Court.

4. The trial Judge’s orders provided that the assets of the parties, as determined by her, be apportioned as to two thirds to the husband and as to one third to the wife.

5. The wife’s Amended Notice of Appeal filed 19 June 2009 sought to increase the asset pool determined by the trial Judge by the notional addition of at least the sum of $260 000, and to increase the wife’s entitlement to the asset pool of the parties from one third to one half, whether or not the asset pool was thus adjusted.

6. By a cross-appeal styled “Further Amended Notice of Appeal” filed 24 June 2009, the husband sought to have the asset pool determined by the trial Judge reduced by $499 700, in which event the husband did not seek to disturb the trial Judge’s conclusion with respect to the respective entitlements of the parties. In the event of his challenge to the trial Judge’s determination of the net assets of the parties failing, the husband sought that the asset pool be divided as to 70 per cent to the husband and 30 per cent to the wife.

7. On 29 June 2009 the husband filed an Application in the Appeal seeking leave to adduce further evidence. The further evidence sought to be adduced was contained in an affidavit sworn by the husband’s accountant Mr J on 29 June 2009, and related to the asserted double counting by the trial Judge in the course of her quantification of the assets of the parties. The affidavit also alleged that a taxation liability of the husband had crystallised, and expressed an opinion as to the quantum of a liability which had not been crystallised.

8. Senior Counsel for the husband, correctly in our view, conceded that Mr J’s evidence with respect to the quantum of the husband’s existing and anticipated tax liabilities, though potentially relevant to the re-exercise of the Court’s discretion if the appeal and/or cross-appeal succeeded, could not impact upon the determination of the appeal or cross-appeal.

9. Senior Counsel for the husband also acknowledged that the assertion that the trial Judge had doubled counted to the husband’s detriment in her determination of the asset pool was not dependent upon any further evidence, and was in reality a Ground of Appeal which had not previously been raised on the husband’s behalf. By leave, on terms, and without opposition from Counsel for the wife, Senior Counsel for the husband filed a further Ground of Appeal in relation to the alleged double counting. The Court made orders providing for written submissions to be made by Counsel for the wife in response to the submissions of Senior Counsel for the husband in support of the additional challenge to the trial Judge’s decision. Written submissions have been provided on behalf of both parties pursuant to those orders.

10. It is apparent that, albeit in different directions and with respect to different items, the appeal and cross-appeal involve challenges to the trial Judge’s quantification of the property of the parties. The wife contends that her Honour significantly undervalued the asset pool. The husband asserts that the trial Judge’s determination of the property of the parties was flawed by her having significantly double counted property in his hands. The appeal also involves the wife’s complaint that the trial Judge erred in awarding her one third of the property of the parties and that such entitlement was inadequate and fell outside the ambit of a reasonable exercise of discretion. The cross-appeal involves the husband’s complaint that the award made by the trial Judge in favour of the wife was excessive and fell outside a reasonable exercise of discretion.

Background

1. For reasons which are apparent, providing a brief but meaningful background to these proceedings is neither easy nor straightforward. The matters of background which we shall recount find expression in the trial Judge’s Reasons for Judgment, and are not controversial for present purposes.

2. On 14 June 2006 the wife commenced the proceedings for settlement of property against the husband which resulted in the trial Judge’s decision of 8 May 2009. The trial Judge heard the proceedings in May 2008. Earlier that year the wife passed away. The wife’s legal personal representative is the parties’ grandson.

3. The husband was born in 1910. He is accordingly 99 years of age. The wife was born in 1918. The wife was aged 89 when she died. Both parties were born in Albania.

4. The parties married under Albanian customary law in 1934. There were three children of their marriage: Y, who was born in April 1940; E who was born in July 1942; and B who was born in November 1946. The children of the marriage are accordingly 69, 67 and 63 years of age respectively.

5. Each of the parties’ children married. There were children of each of their marriages. The family tree of the Konitzas is set out hereunder:

Mr Konitza   Mrs Konitza  (1910 -         )  (1918 – 2008)
Married 1934
Y (daughter) (1940-           )					E (daughter) (1942 -          )					B (son) (1946 -          )
Married D A (deceased)					Married N B (deceased)					Married 1969 Z Konitza
V & R (1960 -   )       (1963 -  )					F, A & W					G & U (1974-   )  (1971 - )
Married 1989 I
2 children

1. The parties cohabited from 1934 until 1946. They lived separately and apart and had virtually no communication with each other from 1946 to 1990. The parties lived in the same premises for approximately 12 months in 1993-1994. The marriage was dissolved by decree pronounced on the wife’s application in December 2006.

2. In 1946 the husband left Albania. The wife and then two children of the marriage remained in Albania. As a result of the husband’s departure from Albania, the wife was imprisoned there for several years. The two elder children of the marriage were separated from the wife for a number of years at that time. The third child of the marriage, who was born whilst the wife was incarcerated, lived in prison with her. Subsequent to 1946 the husband could not return to Albania, whilst the wife and children could not leave Albania. In 1948 the husband came to Australia and has lived here ever since.

3. After the fall of the communist regime in Albania, and following a short visit to Australia, the wife commenced living in the United States of America, where she resided until the time of her death.

4. Subsequent to his arrival in Australia, the husband accumulated property, the most significant of which was a rural property at X which he purchased in 1996 in joint ownership with his brother. By the time the property was sold in 2006, it comprised approximately 3000 acres, of which approximately 2500 acres had been cleared and used for primary production.

5. From 1946 until 1990 the wife lived in prisons, labour camps or institutions controlled by the communist government which ruled Albania during those decades.

6. In 2002 the husband’s brother died. The husband borrowed to acquire his late brother’s half interest in the X farm, and to acquire his brother’s interest in the partnership, “[K] Brothers”, through which they had traded for more than three decades.

7. On 26 October 2005 the husband transferred a 100 acre parcel of land at X to his grandson R. The property was worth approximately $260 000 at that time.

8. A controversial issue at trial and in the appeal relates to the trial Judge’s rejection of the wife’s claim that $260 000 should be notionally added back to the asset pool.

9. R had arrived in Australia with his family in October 2004, whereupon he commenced living on the X farm with his grandfather and great uncle. R then commenced working on the farm, and has continued to do so to the present time.

10. On 1 July 2005 the husband transferred two thirds of his farming partnership to R and his wife I.

11. In October 2006 the husband sold the X property for $4 500 000. A term or condition of the sale of the property ultimately came to be that the husband could occupy the farm at a rental of $1 000 per month, provided that the purchaser of the property could terminate the husband’s tenancy on the giving of 60 days notice. After payment out of monies secured against the X property, approximately $3 000 000 remained.

12. In January 2007, the husband gave $499 700 from such sum to his daughter Y. Y utilised those monies to purchase a residence. Y had looked after the husband and his late brother from the mid 1990s.

13. The wife sought, successfully, to have the sum of $499 700 thus provided to Y notionally added back to the asset pool in the face of the husband’s opposition. The trial Judge’s notional adding back of that sum gives rise to one of the husband’s complaints in the appeal. The husband has at all times contended that no part of the $499 700 should have been added back to the asset pool.

14. At trial, the wife sought 50 per cent of the adjusted net asset pool in reliance upon her contributions.

15. The husband sought a differently adjusted asset pool be apportioned between the parties, as to 90 per cent to him and 10 per cent to the wife by reason of the parties’ respective contributions. At trial the husband sought a section 75(2) adjustment. The trial Judge rejected his contentions in that regard. No part of her Honour’s refusal to adjust in favour of the husband pursuant to section 75(2) gives rise to any complaint by the husband in the appeal or cross-appeal.

The trial Judge’s Reasons for Judgment

1. In the course of a necessarily very lengthy and closely reasoned judgment, the trial Judge provided a comprehensive account of the history of the parties to the proceedings. Our review of her Honour’s Reasons for Judgment need only concern itself with those parts of the judgment which are potentially significant in the light of the issues emerging from the wife’s Amended Notice of Appeal, the husband’s Further Amended Notice of Appeal, and the husband’s additional Ground of Appeal.

2. Having identified the competing claims of the parties, the trial Judge provided a detailed “background” to the proceedings. We have set out above by reference to that much more detailed account, the matters of background which we regard as significant for the purposes of the issues which we are required to determine.

3. The trial Judge found with respect to the sale of the X property that: 

   98.In October 2006, the X property was sold to [WA] Pty Ltd for $4.5 million, and the orders were put in place. The agreement provided that the husband could lease back the property not being used for mining operations for five years, with a five year option. The funds were disbursed as follows:

Discharge of mortgage	$1,550,000
Invested pursuant to interim court order	$1,700,000
Payments to wife (10% of net sale proceeds pursuant to interim order)	$283,092
Payment to [WE] – legal fees for settlement	$8,316
Moneys advanced to daughter, [Y] to purchase [M] property including stamp duty (see following)	$499,700
Balance to husband	$1,727
TOTAL	$4,042,835

99.The husband had received, on 27 October 2006, a deposit of $460,000 paid by [WA Pty Ltd]. In error, those moneys were paid to the husband’s loan account rather than to his business account.

1. Her Honour referred to the husband’s affidavit evidence with respect to the utilisation of the funds which he thus received upon the sale of the X property. They were asserted by the husband to have been to:

   100.    …

   ·    fund his personal living expenses

   ·    fund his legal fees

   ·    provide ongoing working capital for the farming partnership which amount included rental to [WA Pty Ltd] and ongoing operating costs; and

   ·    to discharge the temporary overdraft facility.

2. In relation to the payment of $499 700 from the proceeds of sale from the X farm property to the parties’ daughter Y, the trial Judge found:

   103.In January 2007, the husband provided $499,700 from the proceeds of sale to purchase a property at [M], for [Y], who has helped care for the husband and his brother since 1993. The husband’s evidence in this regard was:

   ·    he would eventually be required to leave the [X] farm and would in all likelihood live with her;

   ·    [Y] had worked tirelessly for him for a long period without recompense;

   ·    he wanted his daughter to have accommodation for herself, and her son, daughter-in-law and two grandchildren in Perth, as his grandchildren were both attending high school in Perth.

3. The trial Judge referred to an extensive “statement of agreed facts” prepared by the parties’ lawyers and filed shortly prior to the commencement of the trial. Although those matters assumed significance at trial, for reasons which will emerge, it is unnecessary to refer to them for present purposes, save for the following paragraphs:

   113.     …

   5.The husband fled Albania [in 1946] because he was told that he was going to be arrested because of his actions in opposing the Communist Government, and had he remained and being in his position as a [senior bureaucrat], he had every reason to believe that he faced execution.

   6.Not long after the husband fled Albania, his wife was arrested and imprisoned by the … authorities at a time when she was pregnant with [B], and had 2 children, [Y], born in April 1940, and [E], born in July 1942.

   7.The wife was placed in a prison camp with the children in which conditions were extremely harsh and cruel.

   8.As the husband had been marked as an enemy of the state, it was consistent that the wife would have had a period of imprisonment and then been released to an internment camp, which was a village in the countryside where former detainees were put to work in agriculture.

   …

   12.The wife and the children’s fate was sealed at least until the fall of the regime in 1990.

   …

   23.The wife made no direct or indirect financial or non financial contribution to the acquisition, conservation or improvement of any of the assets of the husband which:

   a)existed at when she arrived in Australia (December 1992);

   b)existed at the date when proceedings were commenced by her on 14 June 2006; and

   c)existed at the date of the trial.

1. Against that background, the trial Judge considered the provisions of section 79(8) of the Family Law Act 1975 (Cth) (“the Act”) which governed the proceedings before her. After referring to a number of authorities, in relation to whether the relevant time for deciding whether the Court would have made an order was when the deceased party was alive and a party to the proceedings, her Honour recorded that:

   125.…I would have made an order with respect to property if the wife had not died, having regard to the extent of her contributions to the marriage, to ensure that she, or her estate, received her, or, its just and equitable entitlement.

2. Her Honour recorded the thrust of a number of submissions made by Counsel for each of the parties with respect to the motivation for the continuance of the wife’s claim. After reference to a number of authorities, including Tasmanian Trustees Limited (Administrators of Estate of Gleeson) v Gleeson (1990) FLC 92-156 at p 78,086, the trial Judge concluded that:

   136.…While it is for the husband to provide assistance to family members as he thinks fit, this does not affect the fact the wife has entitlements which she, and now her estate, can expect to be established by these proceedings. It is then for the wife’s funds to be distributed in accord with the wife’s will (or the determination of another court). The wife bequeathed her estate to [B], but there is considerable intermixing of his and his father’s finances, and Gordon may well benefit in the short, as well as the long, term. I am satisfied that it is still appropriate to make an order with respect to property, having regard to these issues and the extent of the wife’s entitlements.

3. The “assets and liabilities” of the parties were then considered.

4. Her Honour first referred to the proceeds of sale of the X farm property approximating $3 000 000. She found that the sum of $1 700 000 had been, and continues to be, vested in an interest accruing account, was worth, inclusive of interest, $1 818 664. The wife had received $283 092 from the proceeds of sale of the X farm property. That sum was uncontroversially notionally added back to the asset pool. (Reasons for Judgment, par 141)

5. The balance of the net proceeds of sale of the X farm property, which the husband had received in the sum of $958 224, were also added back. As will be seen, that sum is controversial insofar as $499 700 of that sum has been paid to the parties’ daughter Y, and utilised by her to purchase real estate. The figure is also controversial in the context of the husband’s contention that the trial Judge erroneously doubled counted when quantifying the asset pool.

6. The trial Judge then considered the “Value of the husband’s interest in the farming partnership”. For reasons which she detailed, her Honour concluded that the husband’s interest in the partnership between himself, his grandson R, and R’s wife I, was worth $279 052. (Reasons for Judgment,

   
   

   par 149) That sum is not controversial as such, but its inclusion, and how it came about are matters relied upon by the husband in support of the assertion that the trial Judge double counted when quantifying the asset pool.

7. The “Wife’s proceeds of Albanian compensation claim” were considered by the trial Judge. She concluded that:

   154.On the evidence before me, I do not accept the wife benefited from any payment received, and that any relevance to these proceedings is only really that the Albanian government accepted she was entitled to compensation for the treatment to which she had been given by the previous regime.

8. The trial Judge’s conclusions with respect to “Money provided to family members” is in most respects uncontroversial, although the 2006 transfer of land at X to the parties’ grandson R (worth $260 000) remains part of the issues. The trial Judge recorded the wife’s contention that the present value of the land, $468 000 should “be included as an additional addback at that value”. (Reasons for Judgment, par 169)

9. Her Honour also recorded the husband’s opposition to her doing so and described the basis of such opposition in the following terms:

   172.The husband’s evidence was that the property had also been transferred to [R] because of the help he provided to the husband on the farm, as he has worked the farm since his arrival in Australia in October 2004. The husband’s evidence was that [R’s] assistance resulted in the farming activities becoming more profitable and otherwise he would have to have left the farm, which he was very reluctant to do. He said “without it, I would be dead”. [R] assumed the management of the day to day operations of the farm, but also performed manual labour. Without [R’s] assistance, the husband would have been unable to service the borrowings. Neither [B] nor any of his children had been interested in helping him with the farming operations.

10. Reference was also made to the evidence of R, her Honour recording that:

    173.[R’s] evidence was that the farm was in a very poor state when he arrived, and although his initial venture of growing vegetables was unsuccessful, he had continued to work the farm. He lives on the farm during the week, with the husband, and spends weekends in Perth with his wife and children, so the assistance he provides to the husband has separated him from his family during the working week.

11. After referring to a number of relevant authorities, her Honour concluded that:

    179.I am satisfied that in relation to all the gifts and provisions made by the husband prior to the commencement of the proceedings, whatever they may in fact be, that it is not appropriate to include them as addbacks to the asset pool.  At the time the gifts were made, including the transfer to [R], the proceedings were not even hinted at, and having regard to the history of the family, including no requests by the wife for funds, the husband was entitled to reasonably conduct his affairs post-separation in a manner consistent with getting on with his life.  The husband made varying and quite extensive provision for a number of family members, including [G], and others living in the United States.  In relation to [R], while the gifts are substantial, I accept the reasons for the provisions are reasonable and valid in the circumstances, as it is clear that otherwise, the husband would probably have had to give up living on the farm, which had been his home for many years.  Apart from [Y], there has been little sign of any other family member offering to assist the husband in any way – in fact, the impression with which I am left has been that some of the rest of the family’s interest in the husband has almost entirely been what he can do, financially, for them.

12. Her Honour concluded with respect to the provision of $499 700 to Y that:

    180.While it was understandable and morally appropriate, and I do not criticise the husband for making it, the gift of the home to [Y] made after the proceedings commenced is clearly in a different category, and I have concluded has to be regarded as a substantial premature distribution of assets.  By then, the wife’s hotly fought proceedings for settlement of property had been commenced, and the husband should have been well aware any transaction would be subject to scrutiny.  While it was for the husband to make any provision to [Y] he considered appropriate, it would be unjust to the wife’s estate not to include the sum provided to be brought to account as part of the asset pool.  Therefore, the husband should be regarded as retaining the whole of the funds he received from the [X] property.

13. At trial “The alleged loss on the sale of the [X] farm” was an issue. The trial Judge analysed the issue in detail and concluded that:

    193.In relation to this issue, although more information should have been made available regarding the husband’s problems with [WA Pty Ltd] prior to trial, and while it may have been possible for the husband to achieve a higher price for the property had it not been for the lease back, having regard to the history of negotiation and the commitments and complications of the [WA Pty Ltd] agreement, I am satisfied on the evidence, in his circumstances of being very elderly and having lived on the property for many years, that it was reasonable for him to enter into the contractual arrangement on the terms he did.  Any possibility the property could achieve a higher price in different circumstances does not now affect my determination.

    Albeit indirect, that conclusion assumes some significance in the wife’s appeal. The trial Judge did not alter the quantification of the asset pool by reference to the topic. That decision is not controversial for present purposes.

14. Under the heading “Addbacks for legal fees”, the trial Judge considered whether $97 297 which the husband had paid for legal fees should be notionally added back to the asset pool. Her Honour’s conclusion was that such sum should be. So doing is not of itself controversial for present purposes, although the probable source of funds which gave rise to the payment of those legal fees assumes significance in the context of the husband’s complaints that the trial Judge double counted when quantifying the net asset pool.

15. Her Honour relevantly recorded in relation to this topic that:

    199.The husband’s position was that there should be no addbacks for legal and valuation fees as the husband’s legal fees had been paid by debiting his capital account or partner’s account in the partnership, so was built up by virtue of income earned by the partnership, and in accordance with Chorn v Hopkins (supra), the payment of legal fees from post-separation accumulation of income should not be added back into the pool of the assets. 

    200.The difficulty I have with the husband’s contention is to the extent that income has been post-separation, it is not through his personal efforts, as he is retired, and his income really is more by way of ongoing benefits received from investments.  In these circumstances, I propose to add back the sum of $97,297 received. 

    201.The husband’s affidavit evidence was that some “legal fees” have been paid from the monies received from the sale of the [X] land, which I have concluded is to be added back in full.  Although I do not believe there was evidence about this, I appreciate it may be that some of the $97,297 paid would then be doubly counted in the addback if it had been met at all from the money received by the husband from the [X] land.  Of course, it is possible that the husband has paid additional fees owing at the time from the proceeds of sale, or that the legal fees were fees not in relation to these proceedings, and if so, there would be no issue.  This is in accord with his counsel’s submission that the $97,297 came from his partnership account, but if an injustice could result, I may be prepared to revisit this minor issue if necessary, or considered appropriate.

16. The trial Judge did not take into account any liabilities which had not already been discharged. Her decision in that respect is not controversial for present purposes.

17. For the reasons which she had thus articulated, the trial Judge concluded that:

    208.The total assets, excluding interest and tax on the interest, are $3 325 368.

18. Prior to the husband amending his grounds of cross-appeal to assert double counting of his assets, the wife’s contention was that the figure her Honour thus found should have been at least $260 000 higher ($3 585 368). On the hearing of the appeal and cross-appeal, the husband contended, in essence, that the figure should have been either $499 700 less ($2 825 668) or in the alternative, $476 196.33 less if Senior Counsel for the husband does not persuade this Court that the trial Judge erred in adding back the $499 700 which the husband provided to Y.

19. The contributions of the parties where then considered by the trial Judge. Her Honour recorded in that regard that:

    211.There is no doubt that the husband has made 100% of the financial contributions to the asset pool, and the wife has made 100% of the contributions as a parent, until the children were adults (and well beyond), from the time the husband fled Albania in 1946 when [Y] was 6 years and [E] was 4 years old.  The wife was then expecting [B].

20. Her Honour further recorded that:

    212.Up to 1946, it is not disputed that the parties made appropriate contributions in their respective spheres, the husband being the breadwinner and the wife being a fulltime homemaker and parent.  Prior to the Second World War, the husband had mainly been in the army, and the parties had lived with his family.  The husband’s mother died quite young, and so the wife was required to care for his young siblings, [S], being then only four years old.  He regarded her as his mother figure.

21. The husband’s contributions to the family thereafter were described by the trial Judge in the following terms:

    220.Until provision of 10% of the proceeds of sale of the [X] property to the wife in these proceedings, he had made very little financial provision for her.  After an initial attempt, it was probably not until about 1990 that he and his brother sent some televisions and some household goods to Albania once the communist regime fell, and he then made some other minor funds available to the wife and [Y].  He supported the wife during the time she lived in Australia with him, including arranging medical and dental treatments for her, and when she left he provided her and [Y] with about $5,000, with the intent she would use the funds to purchase a property in Albania, which he believes the wife did.

    221.The assets acquired by the husband over the years have largely been retained, apart from the provision for various family members in the years since the family left Albania.  He has not been ungenerous in his provision for family members since the fall of Communism.  However, the gifts have reduced the extent of the parties’ assets.  Of most significance is the gift of the substantive property to [R], which I have determined is not to be added back into the asset pool.  He has also given [Y] the property in [M], but I have determined this expenditure is to be added back into the pool.

22. The respective contributions of the parties were summarised by the trial Judge in the following terms:

    222.As to indirect contributions to the property, the husband made almost all of these.  He and his brother cleared the land themselves over a period of years, and this directly led to its acquisition.  He made improvements to the property, including constructing a home on it, with a builder in the 1970’s, and established the gardens himself.  He has appropriately managed his business affairs.

    223.As to contributions as homemaker and parent, up to 1946, the wife made the overwhelming contribution as homemaker and parent, and the husband made contributions as a parent at times when he was at home.  Apart from the nearly 12 months in 1993/1994, when the parties both lived at the [X] property, neither party has made any homemaking contributions to the welfare of the family constituted by the parties to the marriage, as the parties did not live together.  Since 1994, the marriage has finally broken down and the parties have been living in different countries, and have made virtually no contributions of any sort to each other.

    224.From 1946, until the family left Albania from 1990 onwards, the husband also made virtually no contribution to the children of the marriage.  Since then, he has made many contributions to the family.  Although he was criticised by [B], he did try to assist him when he arrived in Australia illegally in 1991, and was detained in an immigration detention centre.  From time to time, he has provided funds for family members, and accommodated family members at his home during visits.

23. After reviewing the evidence before her with respect to the husband’s departure from Albania in 1946, and extensive references to the transcript of evidence given by the husband before a United Nations Commission, the trial Judge recorded that:

    253.I accept that the husband was very much under suspicion at the time he left.  I am satisfied that had the husband remained in Albania, it is highly likely he would have been imprisoned, and possibly executed, if not immediately, then not long afterwards.

    254.For the husband, it was accepted that it was very likely that the fact that he had fled Albania led to the wife and the family being treated as enemies of the people, and imprisoned for several years, as this had happened to many other people, even those who had more distant relatives flee.

24. Her Honour then articulated her conclusions with respect to the parties’ contributions. So doing revealed the difficulty of the determination she was required to make.

    303.It is an inescapable conclusion that, while I have accepted the husband had little real choice in fleeing the country, but could have made the treatment of the family worse by his evidence in [S], what happened to the wife as a result was always out of her control.   The wife’s parental contributions as homemaker and parent could not have been made in more difficult circumstances.  She must be given enormous credit for her parental contributions in relation to [B], as I accept that it is most unlikely that he would have survived without her efforts.  In the extraordinary circumstances, she must also be given credit for her ongoing contributions to [B] and his family in particular, even after [B] attained the age of 18 years.

    304.However, while one cannot usually speculate, it is certain in this case that, in the event that the husband had not fled Albania, while he may not have lived, there would have been no property accumulated during the marriage of any significance, or probably, at all, to be distributed between the parties, as by the time the Communist regime fell, and the family could have had an opportunity to improve their situation, the husband was about 80 years of age.

    305.It is not in dispute that the wife made virtually no contributions after the final separation in 1993/1994.  The husband has continued to make significant financial and indirect contributions, but he had obviously been able to do less manual work as he has grown older and there is evidence the farming operations deteriorated.  The husband provided some financial assistance to several family members, some of which was quite substantial, including the assistance to [R].  While this was considerable and quite recent, this has had the effect of reducing the extent of the asset pool available for distribution. It was to the husband’s benefit, and in the end the wife’s as well, that the property was retained a little longer. A very significant factor is the husband’s acquisition of his brother’s share of the farming property in quite difficult circumstances, and the fact that the property then increased substantially in value prior to its final sale, which was also not straight forward, which is an important consideration in the husband’s favour.  It was not just by the application of market forces. If the husband had allowed the property to be sold after his brother’s death, even on an equal division, the wife would have received considerably less than the amount to which I have decided her estate is now entitled. Even without provision for [R], as a result of the husband’s efforts, the extent of the pool roughly doubled in that short time.

    306.Having been physically separated for so many years, the parties made virtually no contributions to each other, apart from the year in about 1993.  There was, in reality, if not in law, after 1946, no family constituted by the parties to the marriage, even if this was against their respective wishes except for in 1993.

    307.Not surprisingly, I was not referred to any authorities directly on this point, nor have I been able to locate any authority of more than general application in this extraordinary situation.

    308.It is well established that the assessment and comparison of contribution, both financial and non-financial, and the translation of that weighting and comparison is not and cannot generally be a strictly mathematical task, particularly in a marriage of long duration (see Norbis v Norbis (1986) 161 CLR 513 at 521-3; In the Marriage of Gill (1984) FLC 91-582). I consider both parties really made ambit claims in this and other respects. The wife had sought that contributions overall should be treated as equal and I consider an equal overall distribution may well have been appropriate if a claim had been made in 1994, particularly as then also s 75(2) factors would have been relevant. Despite the privations the wife suffered, and her homemaker and parental contributions made in extreme conditions, I do not accept that this is appropriate having regard to the almost total contribution made by the husband, particularly to the direct and indirect contributions to acquisition, conservation and improvement of the substantial property of the parties including in recent years. I also do not accept the submission for the husband that a provision for the wife of 10% on the basis of contributions does anywhere near justice to her efforts in extreme circumstances over many years.

1. For those reasons her Honour concluded (at par 309) that the parties’ contributions should be assessed as two thirds by the husband and one third by the wife.

2. The trial Judge then considered section 75(2) of the Act. She recorded the wife’s case to have been:

   319.The wife’s position was that if the respective contribution based entitlements to the parties to the estate is regarded as equal, then the wife sought no further adjustments pursuant to s 79(4)(e). If the contribution based entitlements were weighted in favour of the husband, then the wife sought an adjustment pursuant to s 75(2)(o) of the Act, for the reasons to which I have already referred, which is that it would be unjust not to take into account the wife’s suffering and hardship which occurred as a result of the husband’s actions.

3. Her Honour recorded that it had been submitted on behalf of the husband that:

   322.…a further adjustment, for s 75(2)(o) factors, was proposed, partly because the husband has to maintain himself, but also because it was accepted by the American family, particularly [G] and [B], that he had an obligation to provide for needy members of the family, and that there should be an adjustment pursuant to s 75(2) factors so that, whatever I conclude the wife is entitled to on the basis of settlement of property, there should be such adjustment so as no additional sums are paid to the wife’s estate.

4. That the trial Judge concluded with respect to s 75(2) that:

   323.Where one party is deceased, it is generally accepted that s 75(2) adjustments may be made only for the surviving party (see Menzies v Evans and Evans (supra). I have concluded that, having regard, in particular, to the husband’s advanced age, living circumstances and the background to those, no adjustments for s 75(2) factors are appropriate in favour of either party. The husband will have ample funds remaining with which to appropriately meet all his needs for the rest of his life. In assessing contributions, I have taken into account the privations suffered by the wife.

5. Under the heading “The fourth step” the trial Judge, having graphically represented the effect of the orders she proposed, concluded that such division was just and equitable. (Reasons for Judgment, par 324)

The Grounds of Appeal and Cross-Appeal.

1. The issues requiring determination in the appeal and cross-appeal fall within two broad categories, as we have earlier observed.

2. The first of those categories relates to the determination of the net assets of the parties or, as they have been described by counsel appearing before us, “pool issues”. Three pool issues arise. The first relates to the sum of $468 000, or at least the sum of $260 000, which the wife asserts that the trial Judge erroneously failed to notionally add back to the asset pool. The second relates to the sum of $499 700 which the husband asserts that the trial Judge erroneously notionally added back to the asset pool. The third issue, relates to the husband’s assertion that the trial Judge “double counted” when quantifying the asset pool.

3. Consistent with authority, the trial Judge determined the asset pool before evaluating the parties’ contributions. Success with respect to some or any of the challenges to the determination of the pool to which we have referred could impact upon the evaluation of the trial Judge’s conclusions with respect to contributions. We shall deal with the pool issues before considering the competing contentions with respect to the trial Judge’s evaluation of the parties’ contributions.

The wife’s challenge to the trial Judge’s failure to add back with respect to the gift of land to R.

1. This challenge finds expression in Ground 2 of the wife’s Amended Notice of Appeal filed 19 June 2009 which provided:

   2.The learned trial judge erred in the exercise of her discretion by declining to include the value of Lot … (being the property gifted to [R] in 2005) in the value of the assets available for distribution between the parties.

2. It is not controversial that, at the date the husband transferred the 100 acre parcel of land to his grandson R, the land was worth $260 000. Nor is it controversial that the value of the land at the date of trial was $468 000. We perceive the wife’s complaint to be that the trial Judge should have notionally added back to the asset pool the present value of the property or, in the alternative, its value at the date of its transfer to R. On the evidence before the trial Judge, the reasonableness or otherwise of the disposition would appear to turn primarily, if not entirely upon the circumstances surrounding the disposition at the time it was made.

3. In support of his contention that it was not reasonably open to the trial Judge to decline to notionally add back the sum of $468 000 (or at least $260 000) with respect to the property the husband transferred to the parties’ grandson R in 2006, Counsel for the wife submitted that:

   25.In RFJ paras 176 to 179 … the learned trial judge discusses the legal principles relevant to whether the husband’s disposition of Lot xxx should have been added back to the pool. The learned trial judge considers the decision of C v C (1998) FamCA143 as authority for the proposition that monies disposed of by “Providing modest support for…adult children” should not be included as addbacks.

   26.The appellant wife submits that it was not open to the learned trial judge to find that the disposition to [R] of a property worth about $468,000 at trial (and valued at $260,00 in October 2005) was in the category of “providing modest support”, especially in circumstances where the husband had already gifted 2/3^rd of the farming partnership to [R] and his wife, [I] (RFJ para 76 …) both transfers occurring within about 12 months of [R’s] arrival in Australia in 2004.

   (Appellant Wife’s Summary of Argument, pars 25 & 26)

4. Counsel for the wife submitted that the “injustice” to which the trial Judge referred in her judgment (at par 180) was determined by reference not “solely” to the timing of the disposition, “but also by the size of the disposition in the context of the property pool”. (Appellant Wife’s Summary of Argument, page 10, par 27) It would be difficult to suggest that the “size” or value of property being “disposed of” would not form part of the circumstantial matrix by reference to which the reasonableness or otherwise of such disposition was determined.

5. In the course of dealing with the written submissions of Senior Counsel for the husband in a document styled “Response of the Cross-Appellant’s Summary of Argument” and filed on 29 June 2009, Counsel for the wife submitted that the disposition made by the husband in favour of R was disproportionate to the contributions made by him for the husband’s benefit up to that time. With respect to Counsel for the wife, in the circumstances of this case, that submission encapsulates the crux of the issue before her Honour and this Court.

6. In support of his contention, Counsel for the wife submitted that between October 2004 when R arrived in Australia and commenced to live on the X farm, and the transfer of the 100 acres to him some 15 months later, on 18 January 2006, R could not, on his own evidence, have generated an entitlement to generosity of anything like that magnitude.

7. It was further submitted in support of that contention that, for no consideration, R and his wife I had each received a one third interest in the farming business which was conducted by the husband.

8. R arrived in Australia with his family in October 2004. The trial Judge found that:

   74.In October 2004, [R] arrived in Australia with his family and immediately moved to the [X] property.  [R] brought with him US $30,000 which he deposited into the husband’s business farm account.  This was used to pay outstanding income tax, and for working capital for the farm.

9. Those findings are not controversial in the appeal.

10. As is not in doubt from the partnership accounts (Affidavit of Mr J, 18/04/08, page 30), the opening capital balances of the partnership accounts of R and I do not reveal that they provided any consideration for the one third share which each of them acquired in the husband’s farming business on 1 July 2005. It is equally apparent from those accounts that the profit generated by what became the partnership business for the year ended 30 June 2006 was $89 463, or $29 821 for each of the husband, R and R’s wife. How the $US30 000 contributed by R to the husband’s farm business account in 2004 was treated for accounting purposes is not clear to us, and not greatly significant for present purposes in any event. We have not been referred to any finding that the husband ever repaid the sum of $US30 000 to R.

11. However it was treated, the contribution by R of the sum of $US30 000 could properly be offset against his grandfather’s generosity with respect to the assets which were acquired by him, or by him and his wife in the 2005/2006 financial year. Alternatively, the sum could be offset against the transfer to him of the 100 acre parcel of land in 2006, for no consideration. However the $US30 000 contribution was viewed, it could not have constituted full consideration for the receipt by R of both assets.

12. It was thus inferentially submitted on behalf of the wife that, to the extent that subsequent to October 2004 R and/or his wife had, by their unremunerated contributions, generated an entitlement to some provision from the husband over and above the $US30 000 which they, or R, had deposited to the husband’s farm account, the provision of the transfer to them of two thirds of the husband’s business, and the earnings able to be generated by reason of such transfers was adequate to extinguish any such unsatisfied obligation of the husband. Although we do not understand the case to have necessarily been presented in quite that manner at trial, that proposition has some logical attraction.   

13. It was further submitted on behalf of the wife that the trial Judge’s finding that the husband “would probably have had to give up living on the farm, which had been his home for many years” but for the contributions made by R was erroneous in at least two respects. The first of those was that, as her Honour found, albeit able to be determined by 60 days notice, the husband and the purchasers of the X farm had agreed that the husband could continue to occupy the farm, upon payment of the monthly rental of $1 000. The second of those was that, albeit not until the acquisition the following year by Y of her home with monies paid to Y by her father from the proceeds of sale of the X farm, the husband had another “home” available to him if, for whatever reason, he were no longer to reside on the X farm pursuant to the tenancy agreement between himself and the purchaser of the farm. Such conclusion was asserted to have been available on the evidence of the husband and Y.

14. On behalf of the husband it was submitted that:

    9.The Appellant contends that the transfer to [R] of Lot … should be added back. In doing so he fails to recognise the facts that, without [R’s] assistance and involvement, the husband could not have operated the farm or borrowed funds in order to acquire the interest of his brother’s estate in it. The transfer of this Lot to [R] was really a cost to ensure the preservation of property. [See the husband’s affidavit included by the Appellant…and the husband’s trial affidavit….]

    (Response of the Cross-Appellant to the Appellant’s Summary of Argument, par 9)

15. Senior Counsel for the husband relied upon the affidavit evidence of the husband at trial, set out below:

    Affidavit of husband, 23/08/06

    37.The partnership is not currently trading well as we have had to buy a lot of feed for our stock because poor rains in the early months of 2006 resulted in poor grass being available for them to consume. The partnership generates income from the following sources:

    (a)      the sale of lambs and baby beef; and

    (b)      from shearing.

    Affidavit of husband, 30/04/07

    47.I transferred Lot … and a two-thirds share in my farming enterprise (formerly the partnership between my brother and myself) to my grandson (and insofar as the partnership was concerned my grandson and his wife) for the following reasons:

    (a)Lot … was the first property acquired by my brother and myself and in which we lived for about 12 years. Lot … has always had considerable sentimental value to me.

    (b)At the time when Lot … was transferred to my grandson it was valued at $260,000. Annexed hereto and marked with the letters “MK3” is a copy of a valuation of the property prepared by [Mr L] in October 2005. This valuation was obtained prior to the transfer being effected.

    (c)I was keen to reward my grandson and daughter ([Y]) as my daughter had looked after me and my brother without any recompense for 13 years.

    (d)My grandson immigrated to Australia with his wife and 2 children from the United States in 2004. Upon his arrival in Australia he assisted me with the farming business which operated from the [X] properties. His assistance resulted in the farming activities becoming more profitable. My grandson assisted me by not only assuming the management of the day to day operations of the farm, but also performing manual labour. Without my grandson’s assistance I would not have been able to service the borrowings. Neither my son nor any of his children were interested in helping me with the farming operations.

    (e)It was a condition of my grandson immigrating to Australia that he be able to show the Australian immigration authorities that he had employment and operated a business. He came to Australia on a business visa.

    48.My son, [B], has two children, namely [G]and [U]. [G] is about 35 years of age and [U] is about 37 years of age.

    …

    62.After my brother’s death in 2003 I needed help at the [X] farm. By this stage I could not drive a motor vehicle. My daughter does not drive a motor vehicle. I was reliant on townsfolk to purchase groceries and other items for me.

    63.In 2003 [R] was living in New York and working as the caretaker of an apartment block. He had a wife and 2 children. I approached him and asked him if he would be willing to come to Australia to take over the operation of the farming enterprise. He agreed.

    64.With the assistance of a family friend, an immigration agent was instructed by us to arrange for the immigration of my grandson and his family.

    (original emphasis)

16. Nothing to which we have been referred in the cross examination of the husband precluded the trial Judge from accepting his evidence in relation to this issue.

17. The numerous volumes of appeal books do not refer to R’s affidavit (sworn 02/05/07), even though it is clear that he had sworn one. Neither counsel has referred to the affidavit in cross examination. We have obtained a copy of R’s affidavit. It relevantly alleged:

    31.The farm was in a dreadful condition when I arrived. Sheep were dying because [the husband] was not able to do the work necessary to look after them. The farm was very run down. I was able to improve the property and carry out the necessary work on the farm.

    …

    33.[The husband] was approximately 90 years of age at this stage and the farm is 3,085 acres. Up until mid 2005, I had received accommodation and food for myself and my family in exchange for my work. I did not receive any regular wage.

18. Nothing to which we have been referred in the cross examination of R precluded the trial Judge from accepting his evidence in relation to this issue.

19. In the absence of any reference to further evidence in support of the proposition, we are unable to accept the assertion on behalf of the husband that “without [R’s] assistance and involvement, the husband could not have…borrowed funds in order to acquire the interest of his brother’s estate in it”. (Response of the Cross-Appellant to the Appellant’s Summary of Argument, page 3, par 9) As is not in doubt, the husband had refinanced the X property in order to pay out his late brother’s estate prior to R’s arrival in Australia. Whether the husband could have continued to service the finance facility thus obtained but for R’s assistance is another question all together.

20. The trial Judge’s finding that the husband acquired his late brother’s interest in the X farm property in 2002 has not been challenged in this appeal. Relevantly for present purposes, her Honour found in that regard that:

    71.The husband’s brother, …, died in 2002.  By then, the brothers owned about 3,000 acres and operated a family farming business in partnership which traded as “[K] Brothers”.  The husband acquired the remaining half interest in the [X] farm from the beneficiaries of [his brother’s] estate, [his brother’s] children, for $1.55 million, using funds borrowed from the Bank. [His brother’s] children had commenced Supreme Court proceedings against the husband, as he had not wanted to sell the property.  The repayments to the bank were $11,300 per month, but the intention was the husband would sell off parcels of land, and apply the proceedings to reduce the principal by about 50%.  The loan was on an interest only basis.  The husband also acquired the assets of the farming partnership.

    It is apparent that, correctly, her Honour did not there refer to R.

21. The trial Judge referred to the following evidence of the husband and R, which she clearly accepted:

    172.The husband’s evidence was that the property had also been transferred to [R] because of the help he provided to the husband on the farm, as he has worked the farm since his arrival in Australia in October 2004.  The husband’s evidence was that [R’s] assistance resulted in the farming activities becoming more profitable and otherwise he would have to have left the farm, which he was very reluctant to do.  He said “without it, I would be dead”.  [R] assumed the management of the day to day operations of the farm, but also performed manual labour.  Without [R’s] assistance, the husband would have been unable to service the borrowings.  Neither [B] nor any of his children had been interested in helping him with the farming operations. 

    173.[R’s] evidence was that the farm was in a very poor state when he arrived, and although his initial venture of growing vegetables was unsuccessful, he had continued to work the farm.  He lives on the farm during the week, with the husband, and spends weekends in Perth with his wife and children, so the assistance he provides to the husband has separated him from his family during the working week.

22. No basis for disturbing any of these findings has been established.

23. Whilst there may, as Counsel for the wife submitted, have been no legal basis upon which the husband “would probably have to give up living on the farm”, the evidence before her Honour, which she clearly accepted, permitted her to conclude that, in a practical sense, the husband “would probably have had to give up living on the farm but for [R’s] contribution to the day-to-day running of the farm from October 2004”. In 2004, the husband was 94 years old. His physical capacity for farm work must have been limited by that time.

24. The trial Judge’s conclusion with respect to this issue was expressed in the following terms:

    179.I am satisfied that in relation to all the gifts and provisions made by the husband prior to the commencement of the proceedings, whatever they may in fact be, that it is not appropriate to include them as addbacks to the asset pool.  At the time the gifts were made, including the transfer to [R], the proceedings were not even hinted at, and having regard to the history of the family, including no requests by the wife for funds, the husband was entitled to reasonably conduct his affairs post-separation in a manner consistent with getting on with his life.  The husband made varying and quite extensive provision for a number of family members, including [G], and others living in the United States.  In relation to [R], while the gifts are substantial, I accept the reasons for the provisions are reasonable and valid in the circumstances, as it is clear that otherwise, the husband would probably have had to give up living on the farm, which had been his home for many years.  Apart from [Y], there has been little sign of any other family member offering to assist the husband in any way – in fact, the impression with which I am left has been that some of the rest of the family’s interest in the husband has almost entirely been what he can do, financially, for them.

1. There has, sensibly in our view, been no challenge to any of her Honour’s findings that, at the time the transfer to R was made, a claim for settlement of property by the wife had not been “even hinted at”, that there had been no “request by the wife for funds”, or that the husband was accordingly “entitled to reasonably conduct his affairs post separation in a manner consistent with getting on with his life”.

2. As the decision of the Full Court in C and C [1998] FamCA 143 makes clear, her Honour was entitled, in exercising her discretion with respect to this issue, to rely upon those findings of fact. In C and C the Full Court said:

   46.Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives. Providing modest support for their adult children or taking not inappropriate holidays for themselves seems to fit comfortably within that description.

3. It is reasonably clear that the X farm was worth approximately $3 000 000 in 2002 having regard to the sum which the husband paid to the estate of his late brother in that year for the one half interest. It is not in doubt that the X farm sold for $4 500 000 in October 2006. It is not possible to suggest what the farm might have been worth at the time R became involved in running it, although it can reasonably be inferred that his contribution to the activities of the X farm enabled the husband to continue to operate it as a farm for longer than he otherwise might have, during which period the value of the farm increased. Nor is it possible to suggest what would or might have become of the farm had R not become involved in running it when he did. The husband’s evidence and the reality that he was well into his nineties suggests that the husband would not have been able to continue to run the farm, and service his loan facility, without assistance. What can be said is that R made an important contribution to the consideration of the X property during a period in which its value increased.

4. As we have earlier recorded, the contention of Counsel for the wife was that the “support” for R constituted by the transfer of the 100 acres of land to him could not be reasonably regarded as “modest” either absolutely, or relative to the quantum of the asset pool in this case. The benefit was undoubtedly more than “modest”. That of itself does not mean that it should have been added back. The issue involved a consideration of the reasonableness of the disposition in all of the circumstances.

5. In reality, the only basis upon which the disposition in favour of R could be regarded as constituting a reasonable disposition would be in reliance upon the matters emerging from the evidence of the husband and R, evidence her Honour clearly accepted. We have earlier referred to that evidence. Whilst we do not suggest that no other conclusion with respect to this topic was reasonably open to her, nothing to which we have been referred persuades us that, in reliance upon the evidence before her to which we have been referred, the trial Judge could not reasonably exercise her discretion to decline to add back either the value of the 100 acres at the time of the disposition, or to add back any greater value which it subsequently acquired. 

6. As the authorities make clear, the issue of “add-backs” is discretionary. Each case turns on its own facts and circumstances. The wife bears the onus of establishing that her Honour erred in the exercise of her discretion. We are not persuaded that the trial Judge had regard to any irrelevant fact or circumstance in the exercise of her discretion with respect to this issue. Nor are we persuaded that her Honour failed to have regard to any relevant fact or circumstance. We are thus not persuaded that the exercise of her Honour’s discretion miscarried in declining to add back $468 000 or $260 000 with respect to the disposition of land in favour of R.

The husband’s challenge to the add back of $499 700 provided to Y in 2007.

1. This challenge, amongst others, finds expression in ground 1 of the husband’s Amended Notice of Appeal which asserted that “the learned Judge erred in concluding that the husband’s advance of funds to an adult daughter should be added back to the asset pool”. The complaint was reiterated in Ground 3 and 4(a) of the husband’s Amended Notice of Appeal which provided:

   3.The learned Judge erred in concluding that, in the context of the case, the funds used to purchase the accommodation for his daughter should be treated as a “premature” distribution of assets.

   4.The learned Judge applied the wrong test when she concluded that:

   (a)it would be “unjust to the wife’s estate” [180] not to include the sum provided to the husband’s adult daughter as an add back to the asset pool,

   (b)the wife “has entitlements which she, and now her estate, can expect to be established by these proceedings. It is then for the wife’s funds to be distributed in accord with the wife’s will” [136] and in so doing misdirected herself as to the law.

   (Husband’s Amended Notice of Appeal, filed 19 June 2009, Part E,

   
   

   page 4)

2. The submission of Senior Counsel for the husband in support of this challenge was that:

   4.1The judge was wrong to “add back” the money that the husband had given to [Y] to the asset pool for three reasons:

   a. the money that the husband had given [Y] was to a large extent in itself satisfaction of a moral obligation, she having worked for many years without financial reward;

   b. she was inconsistent in her handling of “premature distributions”. If she was right to reject (as she did) the wife’s submissions … that payments by the husband to six other named relatives should be added back to the asset pool, she ought similarly to have rejected her submissions about the money paid to [Y]. The only distinction without a difference was in the timing. Otherwise, the payment to [Y] was exactly the same; it was (i) a payment to a relative and (ii) in real terms, the money was no longer available for distribution.

   However, the significant distinction is that the husband intends to live in the property bought with the money and [Y] will be looking after him. So it went to the husband’s reasonable provision for his future needs. No-one could say that for someone nearly a hundred years old it was an unreasonable arrangement to make.

   c. she applied the wrong test (or the right test at the wrong time) when she concluded that:

   “…it would be unjust to the wife’s estate not to include the sum provided…as part of the asset pool.” …

   The right approach is to go through the process in 3.6 above and only then, if it is appropriate to make an order, to address the question of “adding back” if the assets available for distribution are insufficient to achieve a just and equitable result. This is consistent with the rule that monies reasonably disposed of should only be added back in exceptional circumstances.

   (footnotes omitted)

3. Counsel for the wife submitted that the trial Judge had not erred in exercising her discretion to add back the monies paid to Y, and relied upon the trial Judge’s reasons for doing so. It was further submitted by Counsel for the wife that the trial Judge did not find, and the evidence did not establish, that the husband’s disposition in favour of Y was defensible on the basis of any unfulfilled obligation to her at that time. We have not been referred to any evidence which suggests that the husband made the payment to Y on that basis, although the trial Judge recorded, and appeared to accept, that part of the husband’s motivation for the disposition was that “[Y] had worked tirelessly for him for a long period without recompense”. (Reasons for Judgment, par 175).

4. As Senior Counsel for the husband fairly conceded in the course of his oral submissions, the husband’s own evidence as to his expectations with respect to the property Y acquired with the monies he had given to her confirmed that the disposition was not a simple or absolute alienation of funds. However it might be categorised, and whatever, if anything, it might ultimately prove to be worth to the husband in practical terms, the husband’s own evidence suggested that the disposition was at least in part to provide for his own future. Y gave no evidence to which we have been referred which was inconsistent with the evidence of the husband in that regard. Although it would seem unlikely given his age, the property may be required by the husband for a significant time in the future. There is no suggestion that Y had ceased, or would cease caring for the husband “without recompense” for the remainder of his life.

5. Her Honour said with respect to the disposition in favour of Y:

   180.While it was understandable and morally appropriate, and I do not criticise the husband for making it, the gift of the home to [Y] made after the proceedings commenced is clearly in a different category, and I have concluded has to be regarded as a substantial premature distribution of assets.  By then, the wife’s hotly fought proceedings for settlement of property had been commenced, and the husband should have been well aware any transaction would be subject to scrutiny.  While it was for the husband to make any provision to [Y] he considered appropriate, it would be unjust to the wife’s estate not to include the sum provided to be brought to account as part of the asset pool.  Therefore, the husband should be regarded as retaining the whole of the funds he received from the [X] property.

6. Having regard to the concessions fairly made by Senior Counsel for the husband with respect to the husband’s evidence as to his “expectations” with respect to the property Y purchased with the funds he provided to her for that purpose, and the matters upon which the trial Judge, correctly in our view, relied, we cannot accept the submission on behalf of the husband that the disposition of such funds was to a “large extent in itself satisfaction of a moral obligation” to Y, much less complete justification for such disposition. Even if it was, in the circumstances of this case, that did not preclude adding back the funds provided to Y. We have not been referred to evidence of any assertion that Y asserted such an obligation on the part of her father, or intended to do so. Nor can it be successfully asserted that Y did not derive benefits from working or caring for the father “for many years without financial reward”. Y will not necessarily be disadvantaged because the distribution of funds provided to Y for the purchase of the property was a “notional add-back” and does not require Y to transfer back to the husband the property in M or to repay to the husband the money advanced for the purchase. The husband can meet his obligation to the wife from his remaining funds without affecting Y. The Orders thus affect the husband and his assets but not necessarily Y and hers. The effect of this is that the husband can still meet his moral obligation to Y if that is his compelling motivation.

7. Her Honour clearly accepted the husband’s evidence with respect to the reasons for the disposition in favour of Y. In reliance upon it, her Honour found that:

   175.From the sale proceeds of the [X] property, the husband had spent $499,700 on purchasing the property at [M], in the parties’ daughter [Y’s] name, in which she resides, as does the husband when he is in Perth.  The husband’s evidence in this regard, as I have already said, was:

   ·he would eventually be required to leave the [X] farm and would in all likelihood live with her;

   ·[Y] had worked tirelessly for him for a long period without recompense;

   ·he wanted his daughter to have accommodation for herself, and her son, daughter-in-law and two grandchildren in Perth, as his grandchildren were both attending high school in Perth.

8. In fairness, it has not been suggested on behalf of the husband that any of those findings of fact was other than reasonably open to the trial Judge.

9. The reasons advanced by her Honour confirm her conclusion that the disposition to Y was in a “different category” to the disposition in favour of R. It is not in dispute that the disposition was made at a time when “the wife’s hotly fought proceedings for settlement of property had commenced”. The husband was at all material times legally represented and, as such, would have undoubtedly been made “well aware any transaction would be subject to scrutiny”. The trial Judge was in our view entitled, having regard to the circumstances surrounding the transaction to Y and the magnitude of the disposition to include that sum in the asset pool. (Reasons for Judgment, par 180)

10. Nothing to which we have been referred establishes that her Honour’s discretion miscarried by reason of her having relied upon extraneous or irrelevant facts or circumstances. Nor was the exercise of discretion vitiated by her failure to have regard to any relevant fact or circumstances. The exercise of discretion was not based upon any material error of fact.

11. The authorities to which we have referred with respect to the previous add-back issue are relevant to this issue. The husband bears the onus of establishing that the trial Judge could not reasonably have exercised her discretion to add back the monies which he provided to Y.

12. We are unable to accept the contention of Senior Counsel for the husband that the trial Judge was “inconsistent” in her approach to the disputed add-backs. The quantum and subject matter of the other disputed add-backs clearly differed from the payment to Y, and differed in other significant respects which the trial Judge identified. We have earlier referred to her Honour’s reasons for declining to add back the disposition in favour of R. (Reasons for Judgment, par 179)

13. Notwithstanding that other conclusions may have been open to the trial Judge in relation to the issue, we are not persuaded that exercising her discretion to add back the monies which the husband provided to Y, in the circumstances which her Honour detailed has been shown to have been other than reasonably open to her.

The asserted double counting

1. As we have earlier recorded, at the commencement of the hearing of the appeals in this Court, albeit as a result of an application filed on behalf of the husband seeking leave to adduce further evidence, the husband was granted leave to agitate a complaint that the trial Judge had double counted by the sum of $476 196.33 when quantifying the net assets of the parties. So doing was asserted to have erroneously inflated the asset pool by that amount. Whereas the trial Judge concluded that the assets of the parties were worth $3 325 368, it was submitted on behalf of the husband that the assets should have been held to be worth approximately $2 849 172. Subsequent to the hearing of the appeal, we have received and read further written submissions in relation to this issue.

2. It was asserted on behalf of the husband, by reference to a letter prepared by his accountant Mr J, and filed in support of the husband’s discontinued application for leave to adduce further evidence, that the trial Judge’s double counting by some $476 196.33 had occurred in the context of her consideration of the husband’s interest in the farming partnership and the receipt by him of the proceeds of the sale of the X property.

3. As is not in doubt, the total proceeds of sale of the property were $4 502 835.74. It is not in doubt that the wife received $283 091.51. It is not in doubt that $1 700 000 was retained, and continues to be retained, in an interest accruing account pursuant to orders of this Court to abide the outcome of the property settlement proceedings between the parties.

4. It is not in doubt that the Bank received two sums, $1 093 202.81 and $460 000, in order to discharge two finance facilities granted by the Bank, which resulted from the husband’s 2002 acquisition of his late brother’s estate’s half interest in the X farm.

5. A disbursement to WE of $8 316.44 was made in satisfaction of legal fees on settlement.

6. It is not in doubt that the husband received $958 224.98 from the balance of the proceeds of sale of the X property. That sum was reduced by the sum of $482 028.65 which was paid to Y and utilised for the purchase to which we have earlier referred. The balance ($958 224.98 – $482 028.65) ($476 196.33) was, as the husband said in his evidence, paid into the account of the partnership between himself, his grandson R and R’s wife I. (Affidavit of Mr J, 18/04/08, page 30)

7. That payment, inclusive of the sum which was paid to Y (and shown in the accounts as $499 700), was reflected in the partnership accounts as a credit to the husband’s capital account. In the financial year ended 30 June 2007, drawings of $656 821.51 reduced the balance in the account to $404 406.69. There can be no doubt that included in the drawings of $656 821.51 was the $499 700 recorded as having been paid to Y.

8. The figure to which her Honour referred for the purpose of determining the husband’s interest in the partnership of $257 052.09 emerges from the balance sheets of the partnership as at 30 June 2008 (Affidavit of Mr J, 18/04/08, page 47). That figure was not controversial at trial and is not controversial now. The trial Judge’s addition of $22 000, for the reasons which she articulated, (pars 144 and 149) is not controversial for present purposes.

9. Senior Counsel for the husband contended however, that having included the husband’s interest in the partnership at $279 052 when, but for $22 000 of that figure, the sum reflected substantially the deposit to the partnership account of $474 524.98 (the difference between $973 224.98 and $499 700) represented double counting of $476 196.33.

10. In a written submission to the trial Judge, Counsel for the husband had included the sum of $257 052.09 with respect to the husband’s interest in the partnership, together with $501 427.80 referrable to “monies paid to parties on settlement of sale of [X] lands”. (Papers for the Judge filed by the Respondent, 23/04/08, page 13)

11. As Senior Counsel for the husband fairly conceded, the figures thus advanced were less favourable to the husband than he has asserted before us. Fairly, it has not been suggested that the husband’s present contention should be rejected on the grounds discussed in Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 and later cases in which the decision was followed.

12. Although, with no disrespect to Counsel for the parties, this issue has been presented in a somewhat complex manner, we do not perceive that it is ultimately difficult. Immediately prior to the receipt of the $958 224.98 the husband’s interest in the partnership was worth $80 856.40. (Affidavit of Mr J, 18/04/08, page 30) To this figure is added the husband’s share of the money owed to the partnership by R and I, being $22 000, which the trial Judge accepted. It has not been suggested that this was erroneous. Accepting, as we do, that the trial Judge did not err in adding back the $499 700 paid to Y out of those proceeds of sale, the monies which the husband received, whether it was $958 224.98 as Mr J suggests and the trial Judge found, or the sum of $973 224.98 which the partnership accounts suggest was paid in, were available to the husband. (Reasons for Judgment, par 141)

13. The husband’s interest with respect to the partnership and/or X farm would have totalled either $958 224 plus $80 856.40 plus $22 000 or, having regard to the accounts, $973 224.98 plus $80 856.40 plus $22 000. There having been no challenge to the trial Judge’s finding that the husband received $958 224.98, it is that figure upon which we prefer to rely. Little turns on what the correct figure is. The husband’s interest in the partnership and the proceeds of sale of the X farm could thus have been found to be $1 061 081.38.

1. The passages to which we have referred provided an adequate evidentiary foundation for her Honour’s conclusion that the sale of the X property was not “straight forward”. Other conclusions in that regard may have been reasonably open to her on the evidence, but that is not the test for present purposes. Accordingly, we are not persuaded that her Honour erred in fact, or discretion, by having regard to the contributions of the husband in the context of the sale of the X property.

The increase in value of the X property

1. In support of the challenge to the trial Judge’s conclusion that the increase in value of the X farm property had not been solely referrable to “the application of market forces”, Counsel for the wife did not refer us to any evidence which was asserted to have precluded her Honour from so concluding. For our part, other than to the extent that the passages to which we have earlier referred imply them, we are unsure as to the precise bases upon which her Honour so concluded. It can be reasonably inferred however that her Honour considered the desire of WA Pty Ltd to acquire the X property to have been relevant to its increase in value. The evidence before the trial Judge established that the sale of the property to WA Pty Ltd was achieved against a background of almost three decades of commercial arrangements with that company, and that not insignificant negotiations preceded the ultimate agreement for its sale.

2. The passages of her Honour’s Reasons to which we have earlier referred identified a sufficient evidentiary foundation for her conclusion with respect to the increase in value of the X property, whatever the extent of factors other than “market forces” may have been. The terms of her Honour’s conclusion are themselves important in this regard. We do not understand her Honour to have suggested a causal link between anything done by the husband in the course of his negotiations with WA Pty Ltd and the increase in value of the property.

3. Whilst other conclusions with respect to this issue may have been open to the trial Judge, we are not persuaded that the conclusion reached by her was not reasonably open to her on the evidence before her.

4. Having concluded that the trial Judge was entitled to have regard to each of the three matters to which we have referred, it is appropriate to move to the broader challenges to the trial Judge’s exercise of discretion.

Other challenges to the trial Judge’s exercise of discretion

1. As the submissions of Counsel for the parties confirm, the wife’s case before us has been that the trial Judge erred in not awarding the wife 50 per cent of the net assets of the parties. The case for the husband has been that, having added back the $499 700 which the husband gave to Y from the proceeds of sale of the X property, a division of the net assets of the parties as to 90 per cent to the husband and 10 per cent to the wife should have been awarded by the trial Judge.

2. Counsel for the wife commenced his submissions in relation to the trial Judge’s exercise of discretion by submitting that:

   The particular and exceptional circumstances of this case require that the wife receive at least an equal contribution-based entitlement with the husband to the property of the parties.

   (Appellant Wife’s Summary of Argument, page 1, par 1)

3. In support of his contentions, Counsel for the wife submitted that:

   7.The appellant wife submits that, based on the findings of the learned trial judge and the uncontested evidence, the defining features of this particular and exceptional case are that:

   (a)The marriage was for a period of 60 years from 1934 to 1994: RFJ para 18 … and para 26 ….

   (b)      For the overwhelming majority of the marriage:

   (i)Being the period of about 46 years between August 1946 and 1992: RFJ paras 33, 35 … and RFJ para 60 …;

   (ii)As a consequence of the husband’s conduct: RFJ paras 265 …; 268 …; 292 …; 299 …; and

   (iii)The wife lived in jail or internment camp RFJ paras 35 and 39 …; 47 …; 60 …;

   the wife made her contributions as homemaker and parent in conditions of depravity so extreme that they cannot easily be contemplated by anyone who has lived in western liberal society: RFJ paras 260-1 …; 276-290 … .

   (Appellant Wife’s Summary of Argument, page 3, par 7)

4. It was further submitted that:

   8.The wife’s entitlement should be at least 50% of the property of the parties by reason of any one or more of the following legal principles:

   (a)The doctrine of special contribution from JEL and DEF (2001) FLC 92-035, at esp. p. 88,330-88,331, 88,335. see RFJ paras 270 and 271 …;

   (b)The significance of the homemaker and parent contribution: Figgins (2002) FLC 93-122: see RFJ para 271 …;

   (c)The relationship between the conduct of the husband and the context in which the wife made her contributions: Kennon (1997) FLC 92-757: see RFJ para 225…;

   (d)The arbitrary nature of any finding other than equality in the context of a 60 year marriage: see Banville [2009] FamCAFC 72 and RFJ para 291 ….

   (Appellant Wife’s Summary of Argument, page 4, par 8)

5. Counsel for the wife submitted that the trial Judge had erroneously exercised her discretion by reducing the wife’s probable entitlement to 50 per cent of the parties’ assets in 1994 to one third of such assets at the date of her judgment in 2009.

6. It was thus submitted by Counsel for the wife that the trial Judge’s conclusion that the wife made “virtually no contributions after the final separation in 1993/1994” erroneously ignored the very substantial indirect contribution made by the wife in not bringing a property settlement claim, thereby permitting the husband to retain and utilise the assets to which the trial Judge regarded her as having at that time an “equal overall” entitlement.

7. Concluding, as her Honour correctly did, that the sale of the X farm property upon the death of the husband’s brother “even on an equal division” would have seen the wife receive considerably less than the trial Judge awarded her, was submitted to have ignored the reality that the wife would have received her entitlement (approximately $750 000) some 14 years prior to her death, instead of having received approximately $283 000 not long before she died, and not living to receive or potentially benefit from the balance of her entitlement as determined by the trial Judge of approximately $825 000.

8. Counsel for the wife relied on the husband’s contention at trial that from 2004 the assistance of his grandson R was required to enable him to continue the farming business. We have rejected the wife’s challenge to the trial Judge’s refusal to notionally add back the $260 000 representing the value of the land which the husband settled upon R in 2006 in consideration of his efforts on the farm. We have not disturbed the trial Judge’s acceptance of the husband’s contentions with respect to that transaction. This, as Counsel submitted, necessarily limited the significance which could reasonably be attached to the husband’s contributions to the farming property between 2004 and the sale of the property some two years later, particularly when regard is had to the husband’s age in 1994 (84 years) and his age at the time the property was sold (96 years).

9. We have earlier referred to the submissions made by Counsel for the wife in support of both the challenge to the adequacy of the trial Judge’s reasons and the challenge to the exercise of her Honour’s discretion. It is unnecessary to repeat the totality of those submissions. For reasons which will become apparent however, it is appropriate to record the submission of Counsel for the wife that the “husband was only able to continue to make contributions to property after the parties’ separation in 1994 because the wife did not make a property claim against him until 2006”. As a result, between 1994 and 2006 at the earliest, the husband had sole and unfettered use and enjoyment of the parties’ assets. As is not in doubt, whatever the wife’s entitlement might have been in 1994, the husband did not have to satisfy any part of such entitlement until after the sale of the X property was completed in October 2006.

10. In the course of his oral submissions, Counsel for the wife made clear his reliance upon the trial Judge’s observation that an “equal overall distribution may well have been appropriate if a claim had been made in 1994, particularly as then also section 75(2) factors would have been relevant”. Even accepting that, from the time of the wife’s death in January 2008, her entitlement could not reflect any section 75(2) adjustment, it was submitted by Counsel for the wife that her contributions continued to entitle the wife to an equal division of the parties’ assets. The bases upon which the trial Judge reduced the wife’s entitlement from one half to one third were thus submitted to have been erroneous. (Reasons for Judgment, par 308)

11. Having regard to her Honour’s reasons, the events which influenced the exercise of her Honour’s discretion were submitted to have been the absence in 2008 of any section 75(2) factors favouring the wife, the contributions made by the husband subsequent to 1994 which her Honour detailed, and her Honour’s perception that, subsequent to 1994 the wife “made virtually no contributions”. It is reasonably apparent from the trial Judge’s reasons that the significant reduction in the wife’s entitlement which she concluded would have been likely to have been appropriate in 1994 (one half) to the date of her judgment (one third) was referrable to the events subsequent to 1994 to which her Honour referred. (Reasons for Judgment, par 305)

12. The course of the submissions of Counsel for the parties before us confirms that the trial Judge’s evaluation of post 1994 events is pivotal to the challenges of both parties to the trial Judge’s decision. Sensibly in our view, the submissions of Counsel for both parties proceeded on the basis that, had the wife’s claim been determined in 1994, she would have been likely to have received half the net assets of the parties at that time. In the circumstances, the fate of the challenges of both parties to her Honour’s decision turns upon the significance of events subsequent to 1994.

13. Reference was made by the trial Judge to the “significant financial and indirect contributions” made by the husband subsequent to 1994 albeit, having attained 84 years of age by 1994, the husband  had “obviously been able to do less manual work as he has grown older and there is evidence the farming operations deteriorated”. (Reasons for Judgment, par 305)

14. Her Honour observed that “it was to the husband’s benefit, and in the end the wife’s as well, that the [X farm] property was retained a little longer”. The “little longer” was from 1994 until the sale of the property in 2006. As we have earlier recorded, the trial Judge regarded as a “very significant factor” the “husband’s acquisition of his brother’s share of the farming property in quite difficult circumstances, and the fact that the property then increased substantially in value prior to its final sale, which was also not straight forward, which is an important consideration in the husband’s favour”. The trial Judge concluded that the increase in value of the X farm was “not just by the application of market forces”. (Reasons for Judgment, par 305)

15. The trial Judge recorded, undoubtedly accurately, that “if the husband had allowed the property to be sold after his brother’s death, even on an equal division, the wife would have received considerably less than the amount to which I have decided her estate is now entitled”. Her Honour quantified the impact of the husband’s post 1994 contributions to which she had referred as having “roughly doubled” the asset pool, as the evidence before her entitled her to conclude. Counsel for the wife submitted that the trial Judge ignored the reality that, quite apart from having had the sole use and enjoyment of the parties’ assets past 1994, the husband too would have received less than he would now receive had there been a settlement in 1994. Unlike the wife, whose death deprived her of the opportunity to benefit from her decades of contributions, the husband would continue to benefit from the enhanced asset pool. (Reasons for Judgment, par 305)

16. In oral submissions, Senior Counsel for the husband, amplified his contention that the trial Judge had not erred in awarding the wife one third of the assets of the parties, albeit, as we have earlier made clear, that submission was predicated upon a successful challenge to the adding back of the $499 700 paid to Y from the proceeds of sale of the X property, and acceptance of the husband’s contention that the trial Judge had significantly double counted when quantifying the assets of the parties. Understandably, Senior Counsel for the husband placed considerable reliance upon the matters to which her Honour referred in her judgment to which we have made extensive reference.

17. It was submitted by Senior Counsel for the husband that the trial Judge’s assertion that “an equal overall division may well have been appropriate” was not “an unequivocal statement” (Transcript, 30 June 2009, page 64) and that her Honour made clear that she was not “finding in essence, that she gave an equal distribution based on contributions alone” at that time. 

18. To the extent that it was submitted on behalf of the husband that the reduction in the wife’s entitlement subsequent to 1994 to the date of judgment was at least in part referrable to the absence of section 75(2) factors in the wife’s favour at that time, we do not accept that such could reasonably have been the case to any significant extent. As we have earlier noted, in 1994, the husband was aged 84 years. The wife was then aged 76 years. Other than by reference to the property which the parties were likely to receive pursuant to the orders of the Court, it is difficult to see on what basis either party would have been potentially entitled to any significant adjustment of his or her contribution based entitlement by reference to section 75(2).

19. It was further submitted in this regard that the trial Judge was:

    …acknowledging in paragraph 308 that the wife’s contribution hasn’t ceased in terms of its evaluating it for its importance but that there was no further contribution during a period in which the husband was making a further contribution and not just a contribution of holding on to property that the wife had an equitable interest in or impressed by an interest in the context of the Family Law Act but that he was doing things. (Transcript, 30 June 2009, page 65, line 17-25).

20. Senior Counsel for the husband amplified his contention to the issue by submitting that from the starting point of a half interest in the farmland the husband had achieved a result where he had become the owner of the whole property in difficult circumstances where he did not have the cash flow to meet the cost the acquisition, and to have negotiated a favourable deal with WA Pty Ltd while continuing to operate the farming partnership which itself was not an invaluable asset. This, it was submitted was properly taken into account by the trial Judge who was not saying that the wife’s contribution ceased in 1994 but was merely giving the husband’s contribution in that 14 year period appropriate recognition.

21. The foregoing submission also encapsulates the essential issue requiring determination.

22. As we have earlier recorded, and at the risk of over simplification, Counsel for the wife submitted that the trial Judge gave no consideration to the wife’s indirect contributions subsequent to 1994, whereas Senior Counsel for the husband submitted that she did. To the extent that the trial Judge did have regard to the wife’s indirect contributions subsequent to 1994, Counsel for the wife submitted that she impermissibly undervalued such contributions. For the reasons we have earlier recorded, Senior Counsel for the husband submitted that the exercise of discretion in relation to the weight given to the wife’s indirect contributions subsequent to 1994 was not entitled to succeed.

23. We agree with Counsel for the wife that the trial Judge erroneously concluded that the wife “made virtually no contributions after the final separation in 1993-1994”. Whilst there is no doubt that the wife made no direct contributions to the conservation or improvement of the property of the parties subsequent to 1993-1994, the wife made substantial indirect contributions, at least to the conservation of the property possessed and enjoyed by the husband during that period. Those indirect non-financial contributions were significant by reason of the trial Judge having concluded, correctly in our view, that, had there been a settlement of property between the parties in 1994, the parties would have shared their assets equally, or virtually equally. Nowhere in her reasons did the trial Judge have regard to the reality that, by not seeking a settlement for property prior to 2006, the wife had made a substantial indirect contribution to the conservation of the assets, and the husband’s use and enjoyment of them. To view the increment in the value of the assets in the way in which her Honour did was, by failing to have regard to that reality, necessarily, and unfairly, to the wife’s detriment.

24. With respect to the trial Judge, the analysis which lead to her ultimate conclusion overlooked the reality that, had she awarded the husband 50 per cent of the asset pool at the date of trial, he too would have received considerably more than he would had there been a property settlement in 1994. It also overlooked the reality that the husband had the exclusive use and enjoyment of the assets, to one half of which the wife was entitled between 1994 and late 2006.

25. It cannot in our view be successfully asserted that, had the trial Judge taken into account the matters upon which Counsel for the wife relied, she could or would have concluded as she did. With respect to her Honour, whilst such section 75(2) factors as may have operated in the wife’s favour in 1994 clearly could not after the wife’s death, their absence could not in our view have properly reduced the wife’s entitlement to one third as at the date of judgement.

26. Although it is unnecessary to do so, and probably impossible in any event, we observe that in 1994 the husband was aged 84 and the wife was aged 76. It is difficult to see in those circumstances how section 75(2) could have materially impacted upon the contribution based entitlements of either party. To the extent that the trial Judge’s findings refer to the situations of the parties, the evidence suggests that, as might reasonably be expected given the ages of the parties, the potential operation of section 75(2) would have been extremely limited.

27. In support of the husband’s cross appeal under the heading “giving the estate a third of the asset pool”, it was submitted that, if the trial Judge’s exercise of discretion to add back monies provided to Y was not disturbed, the wife should have received 10 per cent of the correctly quantified net assets of the parties.

28. Given our conclusions with respect to the wife’s challenge to the trial Judge’s conclusion as to the entitlements of the parties, it is unnecessary to deal specifically with those challenges. The decision of the trial Judge having been successfully impugned, thereby necessitating the re-exercise of discretion, it is, at least in a practical sense in the circumstances of this case, academic whether such result arises by virtue of the success of the wife’s appeal or the husband’s cross-appeal. It is probably necessary only to say that nothing to which we have been referred by Senior Counsel for the husband persuades us that the trial Judge erred by failing to conclude that the net asset pool should be shared between the parties as to 90 per cent to the husband and 10 per cent to the wife. Our acceptance of the contention on behalf of the wife that reducing her entitlement from equality to one third is incompatible with acceptance of the proposition that the wife should have been awarded one tenth of the property of the parties.

1. In reality, irrespective of the merit or otherwise of the husband’s challenge to the trial Judge’s exercise of discretion, both parties will have the opportunity to agitate their competing contentions in the context of the re-exercise of the trial Judge’s discretion.

Conclusion

1. Having concluded that the trial Judge erred in her quantification of the asset pool, and that her discretion miscarried, the appeal and cross-appeal should be allowed. We perceive no impediment to this Court re-exercising the trial Judge’s discretion. The fact that the wife is deceased, and that the husband is ninety-nine years of age, and the abundance of undisturbed relevant findings of fact by the trial Judge suggest that another trial would be quite inappropriate. We accept that it is necessary to afford the parties the opportunity to adduce further evidence (see Allesch v Maunz (2000) 203 CLR 172).

2. Whilst, for the reasons we have articulated, we conclude that the wife’s appeal should be allowed, necessitating the re-exercise of the trial Judge’s discretion, we do not propose setting aside her orders at this stage. Without needing to express a concluded view on the issue, we are concerned that if we set aside the trial Judge’s orders, and the husband dies before her Honour’s discretion is re-exercised, the proceedings would probably abate. As the overwhelming bulk of the property of the parties is legally owned by the husband, the successful appellant would then be worse off than if the trial Judge’s decision had never been challenged. We prefer to avoid the risk of such a perverse outcome.

3. Notwithstanding the view we have expressed, it is also appropriate to provide an opportunity for the parties to make submissions as to whether this Court should re-exercise the trial Judge’s discretion or remit the matter for rehearing before a single judge other than Martin J. Given the age of the husband, and concerns we have recorded, the time for making such submissions will be somewhat less than might otherwise be appropriate.

4. We shall make directions providing for clarification of the matters to which we have referred, in the hope that we may expeditiously re-exercise the trial Judge’s discretion.

I certify that the preceding two hundred and twenty three (223) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court  

Associate: 

Date: 16 September 2009