MACKINTOSH & GREER

[2012] FamCA 55

FAMILY COURT OF AUSTRALIA

MACKINTOSH & GREER [2012] FamCA 55

FAMILY LAW - PROPERTY SETTLEMENT – final orders – adjustment of property interests – whether a global or asset by asset approach was appropriate in the circumstances – where the husband brought substantial assets into the marriage – where the marriage was of a short duration – where a global approach was appropriate in the circumstances having regard to the financial and non-financial contributions of the wife during the marriage – where the husband sought to include a substantial liability into the asset pool – where the Court was not satisfied of the existence or the enforceability of such a liability – where the contributions were assessed at 75:25 in favour of the husband – no adjustment made upon consideration of s 75(2) factors.

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

Biltoft and Biltoft (1995) FLC 92-614
Norbis and Norbis (1986) 161 CLR 513

APPLICANT: Ms Mackintosh

RESPONDENT: Mr Greer

FILE NUMBER: ADC 2242 of 2009

DATE DELIVERED: 15 February 2012

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 2-6 May 2011; 30 May 2011; 1-2 June 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Berman, SC, with Ms Chapman SC

SOLICITOR FOR THE APPLICANT: Howe Martin & Associates

COUNSEL FOR THE RESPONDENT: Mr Whitington, QC, with Mr McGinn

SOLICITOR FOR THE RESPONDENT: Barnes Brinsley & Shaw

Orders

1. On or before 30 April 2012 the husband do all necessary acts and things and sign all necessary documents to transfer to the wife all his right title and interest in the property known as and situated at … G Street in R in the State of South Australia (“the R property”) being Certificate of Title Register Book Volume … Folio … PROVIDED THAT upon or prior to compliance by the husband with the said transfer the wife shall pay all monies and do all things necessary to discharge the joint mortgage over the R property and thereafter exonerate the husband from any liability in relation to the said R property.

2. On or before 30 April 2012 the husband shall pay to the wife the sum of ONE MILLION SIX HUNDRED AND SIXTY FIVE THOUSAND TWO HUNDRED AND THIRTY EIGHT DOLLARS [$1,665,238.00].

3. Save as herein provided the husband and wife be solely, legally and beneficially entitled to the exclusion of the other to all real and personal property of whatsoever kind and nature in their respective ownership, possession and/or control at this date, including but not limited to, any money on deposit, shareholdings, insurance policies, superannuation entitlements, motor vehicles, real estate, furniture and personal effects.

4. Save as to costs all applications are dismissed.

5. Remove all matters from the pending list.

Liberty to apply for consequential orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Mackintosh & Greer has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 2242 of 2009

Ms Mackintosh

Applicant

And

Mr Greer

Respondent

REASONS FOR JUDGMENT

Introduction

1. The proceedings between the husband Mr Greer and the wife Ms Mackintosh relate to the final property settlement orders sought by each of the parties. 

The Trial

1. The trial commenced on 2 May 2011 and continued until 6 May 2011 when it was adjourned part heard.  The matter resumed on 30 May 2011, 1 June 2011 and concluded on 2 June 2011 where I reserved my judgment. 

2. The wife was represented by Mr Whitington, QC who appeared with Mr McGinn.  The husband was represented by Mr Berman, SC who appeared with Ms Chapman, SC. 

3. The wife relied on the evidence of herself and the evidence of two witnesses.  The husband relied on his evidence and the evidence of one witness.

4. They also relied upon the affidavit evidence of additional persons who were not required for cross-examination. 

5. During the trial a total of 27 exhibits were received. 

6. On the final day of the trial, I noted that the wife’s solicitors intended to file further calculations supporting the orders sought. 

Main issues and orders sought

1. The main matters in dispute between the parties at trial were the liabilities and the contributions of the parties which the Court should take into account when making orders for property settlement.

2. Following the conclusion of the trial the wife’s solicitors filed a document setting out the amended calculation which was the basis for the orders sought by the wife.  The document filed on behalf of the wife provided a list of assets, items to be added-back and liabilities.  It showed a “pool of assets and liabilities and superannuation” of $13,887,941. 

3. It was submitted that if the husband’s half interest in the P Business was valued at $108,000 this would reduce the pool to $13,779,941. 

4. On behalf of the wife it was submitted that she should be allocated 40 per cent of this net pool, being $5,511,976.  Counsel for the wife proposed that the wife retain the N property including CC, her property situated in the United Kingdom, her Peugeot car and the proceeds of her personal bank accounts.  The wife also sought that the R property and Z business be transferred to be held solely in her name.  The wife sought a payment by the husband of $3,562,594. This was on the basis that the husband retain all other assets and indemnify the wife in relation to all the liabilities.

5. In the amended case outline document filed on behalf of the husband it was proposed that property settlement be approached on an asset by asset basis placing particular emphasis upon assets which existed at the time of separation and those which were acquired after separation.  It was argued that this approach should be preferred because it was the husband’s view that the parties’ marriage was of a short duration.  Further, it was submitted that the real property of the wife retained at separation was significantly greater in value than at the date of commencement of cohabitation.

6. The husband proposed by way of final orders that the wife receive the husband’s interest in the R property ($670,000) subject to the wife discharging the mortgage over said property.  He further sought that he be kept indemnified with respect to the outgoings over the property.  On this basis the husband sought further orders that the parties retain as their sole property all real estate, shares, savings, motor vehicles, furniture and household effects, superannuation entitlements and any other assets held in their respective names or presently in their respective possessions. 

7. One of the main areas of contention between the parties involved the inclusion of substantial liabilities of the parties into the asset pool.  The wife sought to include loans from Mr MM and her sister, Ms HH together totalling $161,993.11.  The husband sought to bring into account his alleged liability to G Pty Ltd in the sum of $412,944. 

8. The wife also sought adjustments in recognition of her financial and non-financial contributions both during the marriage and subsequent to separation.  In particular, it was argued that the increase in value of the K property could be attributed to the improvements which the wife undertook during the marriage.

Relevant background and chronology

1. The husband was born in 1941 in South Australia and is now aged 70 years.  The wife was born in 1955 in the United Kingdom.  She is now aged 56 years. 

2. The wife is a British citizen and an Australian resident.

3. The husband resided at and continues to reside at, a property known as “K” situated at Town Y, South Australia. 

4. K is a substantial grazing property which consists of extensive farm land, numerous dwellings and crops.  The husband’s interest in K is held by Greer Rural Co Pty Ltd (“Greer Rural”).

5. The majority of the K property came to the husband through inheritance. 

6. Prior to relocating to Australia, the wife resided in the United Kingdom where she earned an income primarily through developing properties for profit.  She also supported herself through leasing out her house situated at H Street, Town SW in the United Kingdom (“Town SW”).

7. Prior to the parties meeting, Greer Rural entered into a joint venture with G Pty Ltd growing crops.  The crops are grown on two parcels of land which are jointly owned and are both part of K. 

8. The parties met while the wife was holidaying in Australia.  They commenced a relationship in September 2000.

9. The wife moved to join the husband in Australia shortly thereafter. 

10. There is a dispute as to the commencement of cohabitation.  The wife’s case is that cohabitation commenced in October 2000 whereas the husband says it was in December 2000. 

11. The parties were married in Western Australia in May 2001.

12. This was the third marriage for both parties.  They do not have any children together.

13. The husband has three adult children from his first marriage. 

14. During the marriage, the parties’ principal place of residence was at the homestead on K.  The wife shipped her furniture, artwork and effects from her Town SW residence to Australia in order to furnish the K homestead. 

15. In May 2001 the parties purchased a property situated at G Street in R with the intention of undertaking significant renovations.  The husband and the wife are joint proprietors of this property. 

16. The husband says that the wife paid the entirety of the purchase price of R as it was then anticipated that the husband would meet the costs associated with the renovations. 

17. The husband says that the cost of the renovations amounted to at least $126,824.  The wife says that the husband’s expenditure would amount to no more than $60,000.

18. The wife says that she met the costs associated with furnishing the R property and asserts that such expenses totalled $53,500. 

19. The husband says that during the course of the marriage, the parties used R as a holiday home.  The parties’ friends and family would occasionally spend short periods there also.

20. The husband asserts that he paid all rates, taxes, insurances and all other outgoings associated with respect to the property from the time that R was purchased until the date of separation.

21. In May 2002 the wife sold her property at Town SW.

22. In mid 2002, the wife commenced extensive refurbishment of the K homestead.  She says that she spent approximately $28,000 on the renovations.

23. The husband denies that the K homestead was in disrepair and says that the wife provided the funds to have some painting undertaken and also to have curtains made. 

24. In August 2003 the wife purchased a property situated at H Street in Town HB, Western Australia (“Town HB”) using her funds only.  The wife alleges that this property was purchased as it was intended that the parties would reside in Town HB for three months each year where the climate would be beneficial to the husband’s health. 

25. In 2004 the husband purchased the remainder of the K property together with an interest in the assets of the farming partnership known as “K Proprietors” for a total of $4,000,000.  The assets of K Proprietors were livestock, plant and equipment and money. 

26. The husband says that the wife did not make any contribution towards this purchase.

27. The husband worked on K with his son JJ on a full-time basis.  He also conducted the accounting affairs of K while JJ mainly dealt with the livestock.  The wife says that she assisted with administrative duties from time to time. 

28. The wife says that she was primarily responsible for the running of the household and that she carried out the majority of the domestic chores with some help from paid employees.

29. In addition, the wife says that she had a significant role in regularly hosting and entertaining the husband’s friends, family and business associates at K.  She purports to have organised, catered and cleaned largely without assistance at such events. 

30. The husband says that during the marriage the wife had the use of credit cards which were linked to his accounts.  He says that both he and the wife paid for groceries and general household expenses through these accounts. 

31. He also says he solely met the costs of numerous domestic and international holidays for the parties during the marriage.

32. It is the husband’s assertion that the wife was able to retain the property solely held by her due to the lack of requirement by the husband for the wife to contribute to K and also to their domestic arrangements.

33. On the contrary, the wife alleges that the husband deprived her of monetary means and also the use of a vehicle.  The wife subsequently purchased her own car in 2007.

34. The wife further claims that the husband denied her opportunities to earn income for their household.  In particular, she alleges that the husband objected to her proposed business ventures to convert old properties on K into bed and breakfast businesses.

35. In 2004 the wife’s father gifted a portion of farming land known as BB in the United Kingdom to the wife.

36. Sometime in 2004, the wife commenced renovations on an old derelict cottage situated on “K” proposing to turn it into a restaurant.  The parties allege that the other party proposed the idea.  The wife says that she contributed approximately $300,000 towards the renovations.

37. In September 2005, the wife opened the restaurant Z Business.  The wife was solely responsible for the running of the restaurant. 

38. The Town HB property was sold in September 2006.  The wife derived a substantial capital profit.

39. The wife used the profits from the sale of the Town HB property to purchase a property and restaurant business called “[Business 1]” at N, South Australia.  It was later renamed “[Business 2]”.

40. In July 2007 the husband fractured his pelvis during a farm accident.

41. The husband says that at this stage, the parties’ relationship had been deteriorating for some time.

42. In February 2008 the wife left on a skiing trip overseas to France and to visit her family.  She says that she left with the husband’s knowledge and after he declined her offer to remain in Australia during this time.

43. Following complications arising out of this injury, the husband underwent surgery in February 2008.  He was hospitalised for approximately three months. 

44. The parties separated on 15 May 2008 when the wife left the matrimonial home.  They were later divorced in August 2009. 

45. The wife ceased trading at Business 2 soon after the parties separated. 

46. Following separation, and despite not returning to the R property, the husband says that he continued to pay for the utilities deposing to having spent $26,472.93 to meet such costs.  The wife says that the husband ceased paying any costs associated with the R property from May 2009. 

47. Since separation the wife says that she has rented out R from time to time to holiday makers.  However in more recent times the wife has used R as her primary residence.

48. Upon separation, the wife drew a sum of $100,000 from the Bank SA Business Maximiser account in the joint name of the parties which was secured against R.  The wife says that she had no other means to meet her general living expenses.

49. Since separation the wife says that she has borrowed $460,823 from Mr MM.  The wife says that she has used these funds to meet legal costs, her university course, her niece’s wedding expenses and the balance towards general living expenses.  The wife says that approximately $120,283 has been expended on living expenses.

50. The wife also borrowed from her sister, Ms HH a sum of $41,710.11 to meet personal expenses, living expenses and also to purchase gifts for her family. 

51. Sometime in July or August 2010 the husband says that he was reminded of his liability to G Pty Ltd for the costs associated in maintaining the crops as part of their joint venture.  The husband alleges that his liability as at 30 June 2010 was $412,944.

52. On 8 December 2010 orders were made by me providing that the wife be permitted to reopen Z Business for trade. 

53. The wife says that she incurred significant costs in preparing to re-open Z Business.  She alleges that upon returning to Z Business various items of kitchen equipment had been removed in her absence and without her instruction.

54. The husband says that approximately three of four months following separation the wife attended at Z Business and removed all plant and equipment, furniture and dining utensils from the premises. 

55. The husband says that soon after her departure, the wife organised to have her personal effects removed from K.  Such items included furniture, artworks, household effects and jewellery.

Brief summary of the witnesses and their evidence

1. The wife relied upon her affidavits of evidence-in-chief and Financial Statements together with her oral evidence. 

2. The wife also relied upon the affidavits and oral evidence of Ms LL (Cleaner) and Ms S (Friend).

3. The affidavits of Ms W (Farmer) and Mr SS (Interior Decorator) were also before the Court unchallenged.  They were not required for the purposes of cross-examination.

4. The husband relied upon his affidavits of evidence in chief, his Financial Statement and gave oral evidence in support. 

5. He also called Mr GT to give oral evidence in support of his affidavit.

The Law

1. The Family Law Act 1975 (Cth) sets out specific provisions in relation to property settlement proceedings. The most relevant in this matter are:

Section 79

Alteration of property interests

(1)In property settlement proceedings, the court may make such order as it considers appropriate:

(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or

(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property;

including:

(c)an order for a settlement of property in substitution for any interest in the property; and

(d)    an order requiring:

(i)     either or both of the parties to the marriage; or

(ii)    the relevant bankruptcy trustee (if any);

to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines. 

…

(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;  and

(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;  and

(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent;  and

(d)the effect of any proposed order upon the earning capacity of either party to the marriage;  and

(e)the matters referred to in subsection 75(2) so far as they are relevant;  and

(f)any other order made under this Act affecting a party to the marriage or a child of the marriage;  and

(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

Section 75(2)

(2)    The matters to be taken into account are:

(a)     the age and state of health of each of the parties;  and

(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;  and

(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;  and

(d)commitments of each of the parties that are necessary to enable the party to support: 

(i)     himself or herself; and

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

(e)the responsibilities of either party to support any other person;  and

(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

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

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

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

(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;  and

(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;  and

(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and

(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;  and

(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;  and

(l)the need to protect a party who wishes to continue that party's role as a parent;  and

(m)if either party is cohabiting with another person -- the financial circumstances relating to the cohabitation;  and

(n)the terms of any order made or proposed to be made under section 79 in relation to:

(i)     the property of the parties; or

(ii)    vested bankruptcy property in relation to a bankrupt party;  and

(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:

(i)a party to the marriage;  or

(ii)a person who is a party to a de facto relationship with a party to the marriage;  or

(iii)the property of the person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them;  or

(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii);  and

(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage;  and

(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;  and

(p)the terms of any financial agreement that is binding on the parties to the marriage;  and

(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

Discussion

Assets and Liabilities

1. At the conclusion of the trial the submissions on behalf of counsel indicated that there was not a significant difference in most of the assets and liabilities to be brought into account.  Rather the difference related to how the assets and liabilities should be treated with some minor disagreement about particular items.

ASSETS
Husband

(1)  K including “Z Business”  $10,175,000.00
             (2)  K Proprietors  $1,132,489.50
             (3)  Share Portfolio in ASX listed companies @ 5/2/10  $124,428.00

(4)  Bank SA Business Cheque Account …

@ 31/5/08  $57,533.75
             (5)  Vintage motor vehicle  $55,000.00
             (6)  Shares in SAB Pty Ltd (one-fifth interest)  $24,500.00
             (7)  Shares in Greer Investments Pty Ltd @ 5/2/10  $659,365.00
             Total:  $12,228,316.25

Wife
(1)  M Street in N, including “Business 2”  $600,000.00
             (2)  H Street, Town SW (£285,000)  $507,725.00
             (3)  BB Lands in the United Kingdom (50% interest) (£115,630)         $252,333.00

(4)  Bank SA Freedom Cheque Account …

@ 28/3/11  $16,672.82
             (5)  Peugeot motor vehicle @ 10/2/11  $19,550.00
(6)  Adam & Co Account No … @ 16/2/11 (-£14,703.06)  [-$23,603.40]

(7)  Adam & Co Account No … (50% interest)

@ 16/2/11
  (total £2,322.83) ($3,728.92)  $1,864.46

(8)“PPP” loan £8,270   $13,314.00

Total:$1,387,855.88

Total Assets (Husband and Wife)  $13,616,172.13

JOINT ASSETS

(1)G Street, R  $670,000.00

Total Assets (Husband and Wife)  $14,286,172.13

Addbacks - Husband

(1)Post separation R expenses (total)  $26,472.93

(2)Bank SA Business Maximiser Account repayments

since May 2009  $900.00

Total:$27,372.93

Addbacks – Wife

(1)Post separation R expenses (total)  $8,113.11

(2)Bank SA Business Maximiser Account repayments

since May 2009  $9,016.77

(3)Post separation “Z Business” expenses  $10,553.96

Total:$27,683.84

Total Addbacks (Husband and Wife)  $55,056.77

Total Assets (Husband and Wife (including Addbacks))                $14,341,228.90

LIABILITIES

Husband
(1)  Rabobank (K Proprietors) Overdraft @ 30/6/09  $326,553.53

Total:  $326,553.53

Wife
(1)  Bank SA Business Maximiser Account … @ 28/3/11  $3,500.30
(2)  Bank SA Credit Card Account … @ 28/3/11  $2,304.52
(3)  Capital Finance Loan for Peugeot motor vehicle @ 16/3/11               $43,871.95

(4)  Personal loan from Mr MM @ 30/4/10 and
      including interest less loan to Niece, University course

expenses and legal fees  $120,283.00

(5)Personal loan from Ms HH (£26,759.79 @

7/4/11, converted to Australian Dollars @ 5/4/11)  $41,710.11

Total:  $211,669.88

Joint Liabilities
(1)  Bank SA Business Maximiser Account  $94,123.00
Total Liabilities (Husband and Wife)  $632,346.41

SUPERANNUATION
Husband
(1)  Husband’s Superannuation  $122,476.99
(2)  AMP Life Insurance  $56,582.00
Total:  $179,058.99

Wife
(1)  Wife’s Superannuation  $NIL

Net Total (including Liabilities and Superannuation)  $13,887,941.48

1. In final submissions the wife accepted that one-half of the value of the P Business should be removed, bringing the total net assets to $13,779,941.

2. The parties did not dispute these figures save and except that there was no agreement that each of the items should be brought into account in the manner maintained by each of the parties.  In particular the husband did not concede that the monies owed by the wife to Mr MM and her sister Ms HH were debts which would be brought into account in assessing the assets and liabilities to be considered.

3. The husband also maintained that he was indebted to Mr GT for the sum of $412,944.  The husband seeks to bring this liability into account against the value of the K property which is a property owned and operated as a joint venture by the husband’s company Greer Rural Co Pty Ltd and G Pty Ltd.

4. The figure is calculated by Mr GT as set out in the annexures to Mr GT’s affidavit filed on 13 April 2011.

5. I accept the submissions of the counsel for the wife that the terms of the joint venture agreement entered into between the relevant companies on the 5 November 1998 and the steps which followed thereafter are such that the Court cannot be satisfied that this alleged debt and the method of calculating the interest upon the alleged debt have been sufficiently proved to be liabilities which are likely to be enforceable or indeed enforced.

6. The evidence of the husband, together with the evidence of Mr GT, does not establish a liability with sufficient certainty for it to be brought into account in these circumstances.  (See Biltoft and Biltoft (1995) FLC 92-614).

7. During the trial it was agreed that the “fob-watch” which had been the subject of dispute, was not required to be the subject of orders on the understanding that the fob-watch would be given to the husband’s grandchild HY.

8. The parties agreed that the wife would retain the property at M Street in N, which includes Business 2, her remaining property in Town SW in the United Kingdom and BB Lands in the United Kingdom, together with the other assets, addbacks and liabilities referred to in the Statement of Assets and Liabilities.

9. It was also agreed that the wife would receive by way of settlement the property at R, subject to her discharging the loan in joint names.  The wife wished to have the Z Business property transferred to her.  This was not agreed by the husband.

10. It was agreed that the husband will retain his interest in the other assets and liabilities.

Contributions

1. It was clear from the evidence of both parties that the parties had significant assets prior to their cohabitation.  The husband owned a significant interest in the K property. 

2. At the time of the commencement of the relationship the wife also had significant assets in the United Kingdom.  The husband contends that the parties’ contribution should be considered on an asset by asset basis, particularly taking into account the length of the parties’ relationship.

3. The husband says that he commenced a relationship with the wife in September 2000 and they commenced living together at K in December 2000.

4. The wife says that the parties commenced cohabitation in October 2000. 

5. The parties lived together for approximately eight years.  Both parties had been married twice before.  There are no children of the marriage.  The husband has three independent adult children.  The wife moved from the United Kingdom to Australia where she has resided since, with occasional trips back to the United Kingdom. 

6. The evidence established clearly that the wife has used assets which existed at the time of the commencement of cohabitation (being real estate and investments) to assist in the purchase of R and Town HB, Western Australia properties, acquiring furniture and effects and contributing towards the cost of development of properties and businesses.

7. The evidence also establishes that the husband has had a limited income, but has contributed towards the acquisition and maintenance of the substantial assets and day to day living expenses. 

8. The wife and husband both gave evidence of their contribution towards living expenses, personal items and travel.

9. The wife made a contribution, other than her financial contribution, by assisting the husband in entertaining business associates, family and friends and carried out household chores with the assistance of paid staff.

10. The wife has also made a contribution by redecorating and improving the properties and setting up businesses.

11. The husband has continued to participate by managing and working on the businesses operated on the farming property.

12. On behalf of the husband it is maintained that the marriage should be treated as a short marriage.  That and the husband’s submissions about the financial arrangements during the marriage support the husband’s claim that the approach to the property settlement should be on an asset by asset basis. 

13. On behalf of the husband it is submitted that the submission gains weight because the parties did not “inter-mingle their financial affairs”.

14. The Court accepts that the length of the relationship of approximately eight years should be a factor to be taken into account when considering the relevant factors and whether the settlement is just and equitable.  Similarly, the substantial assets of the husband at the time of cohabitation and the limited contribution by the wife to those assets is also a factor to be considered.

15. The decision of Norbis and Norbis (1986) 161 CLR 513 and the numerous reported cases thereafter indicate that it is appropriate in suitable circumstances to consider the property adjustment on an asset by asset basis.

16. The authorities have indicated either approach to the decision making process is permitted.  The determination of the approach should depend upon the individual circumstances of each case.  The global approach used in many cases promotes the assessment of contributions, both financial and non-financial.  That approach has been generally preferred. 

17. It is necessary to bear in mind the particular contributions made by each of the parties at the commencement of cohabitation, during the marriage and since separation, and to ensure that any overall decision is just and equitable.

18. The wife has contributed to the assets in her name and the assets remaining in joint names (N property, R property and United Kingdom property) and has made financial contributions to the day to day living expenses and renovation and development of Business 2 and Z Business.

19. The financial contribution of the husband of the significant property of K, K Proprietors and Greer Investments Pty Ltd assets, are assets to which the wife made very little direct financial contributions.

20. The husband also made a contribution to the day to day living expenses of the parties and provided his efforts to maintain the assets.

21. Both parties used their various credit card facilities to purchase items for general living expenses for the other party.

22. The wife has made a contribution towards the acquisition, maintenance and improvement of the properties at R, Business 2, Z Business and to a lesser extent, the K property.

23. The financial and non-financial contributions made by the wife since the commencement of cohabitation of the parties in late 2000 make it more appropriate to consider the overall situation rather than consider the issues on an asset by asset basis.

24. When considering the initial financial contributions of each of the parties to the assets which have been acquired and maintained during the relationship and since the relationship, together with the financial contributions of each of the parties generally, the significant factors are the assets and liabilities of each of the parties at the commencement of cohabitation, and the financial and non-financial contributions each of the parties has made during the relationship.

25. Of the assets owned by the parties at the time of commencement of cohabitation the interest the husband then held in the K property is the most significant.

26. The Court takes into account the subsequent acquisition of further assets when giving appropriate weight to the financial and non-financial contributions of each of the parties.

27. At the commencement of cohabitation the husband had significant substantial interest in the K property (being his then two-third interest), K Proprietors and the shareholdings through the Greer Investment company.  This significant initial financial contribution is now represented by a large proportion of the net assets of the parties.

28. Taking into account the initial financial contributions of the parties and the subsequent financial and non-financial contributions of the parties, it is appropriate, just and equitable to treat the contributions of the husband as 75 per cent and those of the wife 25 per cent.

Section 75(2)

(a)the age and state of health of each of the parties;

1. The husband is now aged 70 years.  The wife is aged 56.  The wife is in good health.  There are no significant health factors in relation to the husband which are relevant.

(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

1. The wife is capable of earning an income, both from employment and from her investments.  The husband has an income from the businesses and investments. 

2. The property and financial resources of each of the parties are as set out earlier in the judgment.

3. The wife has the capacity for ongoing appropriate employment.  The husband too receives, and is likely to continue to receive, an income from his property and investment interests.

(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

1. Not relevant.

(d)commitments of each of the parties that are necessary to enable the party to support: 

(i)         himself or herself; and

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

1. Neither party has an obligation to maintain any other person.

2. Each party’s necessary commitments were acknowledged but are not significant issues in this matter.

3. The remaining factors under section 75(2) which require consideration and matters which are relevant to the determination in this particular matter are:

(g)        where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;

1. During the cohabitation the husband and wife enjoyed a reasonable standard of living.  The assets of the parties and their incomes were used for comfortable living standard, entertainment and overseas travel.

(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

1. On behalf of the wife it is submitted that the husband has failed to make full and proper disclosure.  The evidence during the hearing did not establish that any failure to disclose material was such as to require any adjustment.

2. On behalf of the wife it was submitted that if, after considering contributions there was a disparity in the assets of the parties then there should be a substantial adjustment in her favour of s 75(2) factors.

3. Twenty five per cent of the overall net asset pool of $13,779,941 is $3,444,985.

4. The disparity in the capital position of the parties is not a factor which requires further adjustment of the assets of the parties taking into account all of the factors in sections 79 and 75(2).

5. It is necessary to consider the overall outcome of the property settlement and to determine whether the same is just and equitable in all of the circumstances.  If the wife were to receive an overall adjustment of 25 per cent she would be able to retain the Business 2 property, have transferred to her the husband’s interest in the R property, retain her properties in the United Kingdom and other personal assets, pay her outstanding liabilities and have significant further funds.  If the wife retains the assets currently in her name, together with the whole of the interest in R property (and discharge the debt on R $94,123) she would retain net assets of approximately $1,779,747.

6. The husband would then be required to make a further payment to the wife of $1,665,238.

7. The wife would have a substantial amount remaining after the payment of the balance of her debt to Mr MM and her legal costs.

8. The wife sought that the settlement includes a transfer of the Z Business property to her.  The evidence did not clearly establish that such a subdivision would be possible nor the actual cost of such a subdivision.  Z Business was valued at $225,000.

9. The subdivision, if possible, would require ongoing co-operation of both parties.  There would also be a considerable risk of further disputes and costs.  An order for the wife to retain Z Business is not practical in these circumstances.

10. The husband would retain the K property, K Proprietors Investment and his share portfolio.  Offset against these are the K Proprietors overdraft, his legal fees and the need to make arrangements to find the substantial sum of $1,665,238.

Conclusion

1. Careful consideration of all of the factors brings about a conclusion that an adjustment of 25 per cent to the wife and 75 per cent to the husband is in all of the circumstances just and equitable.

2. The wife has an income earning capacity and has an ability to earn an income from the assets she will retain.

3. The wife has not established any basis to support an order for spouse maintenance.

4. The orders will provide for the husband to transfer his interest in the R property to the wife provided that she discharges any liability of the husband in relation to the R property.

I certify that the preceding one hundred and thirty eight (138) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 15 February 2012.

Associate: 

Date:  15 February 2012