Martin & Crawley - [2012] FamCA 1032

FAMILY COURT OF AUSTRALIA

MARTIN & CRAWLEY

[2012] FamCA 1032

FAMILY LAW ─ PROPERTY SETTLEMENT ─ Just and equitable ─ Where both parties sought that their interests in the matrimonial property should differ from their current interests, however disagreed in relation to the consideration which the husband should provide in order to acquire the wife’s interest in that property, or pay her for the loss of the opportunity to share in matrimonial property owned by the husband in the future ─ Where the Count found, as a preliminary conclusion, that it would be just and equitable to alter the parties’ interests in their property ─ Where the Court found that to not alter the parties’ interest in at least the manner, and to the extent sought by the husband would be unjust and inequitable ─ Where having attempted the “principled” assessment (Stanford v Standford (2012) 293 ALR 70; [2012] HCA 52) of an appropriate alteration of the parties interests in the light of the Court’s findings of fact, and conclusions with respect to s 79(4) and s 75(2), the Court was satisfied that its preliminary conclusion was just and equitable

FAMILY LAW ─ PROPERTY SETTLEMENT ─ Contributions ─ What impact the husband’s initial contribution of the W property should have on the entitlements of the parties ─ Where however it is viewed, and quantified, the husband’s equity in the W property at the date of marriage was a substantial contribution ─ Where the W property cannot be seen as the contribution which “kept on giving”, but rather as an initial contribution which, once made, was not subsequently enhanced by the efforts, direct or indirect of either of the parties ─ Where the quantum of the husband’s initial capital contribution, its impact on the property of the parties which currently exists, and the evidence in relation to what was done, and not done in relation to it, persuade the Court that the overall entitlements of the parties to the date of separation favour the husband over the wife by 25 per cent

FAMILY LAW ─ PROPERTY SETTLEMENT ─ Post separation and s 75(2) adjustment ─ Whether the husband dissipated funds in circumstances rendering an adjustment in the wife’s favour appropriate ─ Where during the post separation period, the husband had available to him significantly greater funds for his utilisation than the wife ─ Where the evidence did not establish that the husband neglected his financial obligations to the wife in the post separation period ─ Where the evidence did not begin to establish that, in the post separation period, the husband embarked upon a course of either depleting the property of the parties, or reducing its value, much less of endeavouring to secrete funds in ways or places which were unlikely or difficult to be discovered ─ Where the evidence established that the husband derives tangible indirect benefits through the Trust, and has a greater earning capacity than the wife, and thus a greater capacity to accumulate superannuation in the future than the wife ─ Where on balance, an adjustment in the wife’s favour of 3 per cent was considered to be reasonable in all the circumstances

Family Law Act 1975 (Cth); Part VIII, ss 75(2), 79(2), 79(4)

Adelaide Clinic Holdings Pty Ltd v Minister for Water Resources (1988) 65 LGRA 410
Brett-Hall and Brett-Hall (2006) FLC 93-276
Brisbane City Council v The Valuer-General for the State of Queensland (1978) 140 CLR 41
Coghlan v Coghlan (2005) FLC 93-220
Elsey and Elsey (1997) FLC 92-727
Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1980) 146 CLR 336
Flotilla Nominees Pty Ltd v Western Australian Land Authority & Anor (2003) 129 LGERA 65
Grieves & Grieves [2012] FamCA 691
Hickey and Hickey (2003) FLC 93-143
Housing Commission of New South Wales v San Sebastian Proprietary Limited & Others (1978) 140 CLR 196
Jarrott & Jarrott [2012] FamCAFC 29
Jarrott & Jarrott (No.2) [2012] FamCAFC 72
Kardos v Sarbutt (2006) 34 Fam LR 550
Kennon v Spry (2008) 238 CLR 366
Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705
Mallet v Mallet (1984) 156 CLR 605
Manolis & Manolis (No. 2) [2011] FamCAFC 105
Minister of State for Home Affairs v Rostron (1914) 18 CLR 634
Norbis v Norbis (1986) 161 CLR 513
Pierce and Pierce (1998) FLC 92-844
Rosati and Rosati (1998) FLC 92-804
Spencer v The Commonwealth (1907) 5 CLR 418
Stanford v Stanford (2012) 293 ALR 70; [2012] HCA 52
The Valuer-General v Fenton Nominees Proprietary Limited (1982) 150 CLR 160

APPLICANT:

Ms Martin

RESPONDENT:

Mr Crawley

FILE NUMBER:

DUC

243

2010

DATE DELIVERED:

10 December 2012

PLACE DELIVERED:

Dubbo

PLACE HEARD:

Dubbo and Sydney

JUDGMENT OF:

Coleman J

HEARING DATE:

15 - 16 August 2012 and
21 September 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Campton

SOLICITOR FOR THE APPLICANT:

Pearson Family Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Hodgson

SOLICITOR FOR THE RESPONDENT:

Booth Brown Samuels & Olney

Orders

That, by way of alteration of interest in the property of the parties to the marriage:
(i)the husband pay to the wife the sum of $925,803;
(ii)the wife assign to the husband the sum of $18,296 owed to her by the AA Investment Trust; and
(iii)the wife transfer to the husband the whole of her right title and interest in the property known as “R” and situate at … New South Wales.
That, provided that the husband pays the wife the sum of $600,000 of the sum referred to in order 1(i) hereof within three (3) months of the Court’s orders:
(i)the sum of $200,000 shall be payable within 12 months of the Court’s orders; and
(ii)provided that order 2(i) hereof has been complied with, the sum of $125,803 shall be payable within 24 months of the Court’s orders.
That upon payment to her of the sum of $600,000 pursuant to order 2(i) hereof, the wife shall thereupon complete the assignment and transfer referred to in order 1(ii) and 1(iii) hereof respectively.
That in the event of the husband failing to make any of the payments referred to in order 2 hereof in accordance with the said order, the whole of the sum then outstanding shall be due and payable by the husband to the wife.
That interest shall accrue on the balance of the monies owed by the husband to the wife from time to time pursuant to these orders at a rate calculated as the prime rate prescribed monthly by the Reserve Bank of Australia plus 100 basis points (1 per cent).
That the wife shall indemnify the husband in relation to any liability of the wife to or in respect of:
(i)Westpac mortgage in the sum of $194,073;
(ii)Estate of Ms C in the sum of $104,133; and
(iii)K Business loan in the sum of $26,271.
That upon the husband complying with these orders the wife shall transfer and/or assign to the husband or his nominees, any entitlement by her in, or in relation to:
(i)AA Investments Pty Ltd;
(ii)AA Investment Trust;
(iii)X Transport Pty Ltd; and
(iv)M Education Trust.
That, subject to order 9 hereof, the husband shall indemnify the wife in relation to any liability of the wife to or in respect of the corporations and trusts referred to in order 7 hereof.
That any liability of the husband or the wife or any of the entities referred to in these orders of or incidental to implementation of these orders be borne by the husband as to 57.5 per cent and by the wife as to 42.5 per cent.
That either party have liberty to relist this matter before the Court for implementation of the preceding Orders upon 48 hours notice after the expiry of three (3) months after the making of these orders.
That costs be reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Martin & Crawley 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 DUBBO AND SYDNEY

FILE NUMBER: DUC 243 of 2010

Ms Martin

Applicant

And

Mr Crawley

Respondent

REASONS FOR JUDGMENT

introduction

By Amended Initiating Application filed 23 September 2011, Ms Martin (“the wife”) sought orders for settlement of property pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”) against Mr Crawley (“the husband”).
By her Minutes of Order, the wife formally sought at the commencement of the trial that the husband cause to be paid to her the sum of $1.5 million, and that the wife transfer or assign to the husband her interest in their jointly held property. In final submissions, Counsel for the wife asserted that the husband should be ordered to make a payment to the wife of “about $1.2 million” on that basis.
The husband’s formal application at the commencement of the trial was that he cause to be paid to the wife the sum of $480,000. In concluding submissions, Counsel for the husband submitted that the payment to the wife should be $530,000.
Whilst the parties have been unable to determine parenting issues with respect to the two children of the marriage, it was common ground that neither party would seek any enhancement of his or her entitlement pursuant to s 75(2) of the Act by virtue of the obligation to care for or financially support children in the future.
As will be seen, the controversial issues of factual significance relate principally to the net value of the parties’ property, the value of the husband’s interest in land in northern New South Wales at the commencement of cohabitation, and the utilisation of funds, particularly by the husband, in the post separation period.

background

Some material facts, which are largely uncontroversial, provide background to the proceedings.
The husband was born in 1967. The wife was born in 1967. Both parties are accordingly 45 years of age.
The parties married in November 1995, and separated approximately 12½ years later, on 21 July 2008.
The parties were divorced on 16 September 2011. Neither party has since remarried.
There are two children of the marriage, L who was born in May 2000 and G who was born in May 2004. The children are accordingly aged 12 and 8 years respectively.
Each party is significantly involved in the care of the children, albeit how the care of the children will ultimately be provided has not been resolved.
On 26 May 1995, six months prior to the parties’ marriage, the husband purchased a property known as “W” in northern New South Wales for $85,000. Throughout these reasons, the property will be referred to as “W”. W comprised approximately 1200 acres which, the evidence suggests, could be described as being virgin bush at the time it was acquired.
The husband borrowed from the ANZ Bank to acquire W. The evidence does not establish that the husband contributed any significant amount to the initial purchase price of the property. Whilst it is not in doubt that, subsequent to its acquisition, the husband caused the W property to be cleared, and a timber plantation established on it pursuant to a joint venture agreement between the husband and New South Wales State Forests, how far that work had progressed at the date of the marriage of the parties was highly controversial. In essence, the husband asserts that significant clearing and associated work had been completed by the date of the marriage, whilst the wife asserts that little work of that kind of any significance had by that time been completed.
The reality of the situation is of more than academic interest given that, depending upon how much work had been done upon the property at the date of marriage, its value was in the order of no more than $248,000 (wife’s contention), or as much as $362,500 (husband’s contention). In the joint expert value report, dated 30 August 2012, Mr A and Mr M agreed upon a value of approximately $220,000 at the date of marriage if no significant work had been done (see Exhibit Z).
Given the sum for which W was later sold, and the role it played in the financial fortunes of the parties in the intervening period, the value of the husband’s initial contribution, unsurprisingly, has a considerable impact upon determining a just and equitable division of the property of the parties.
It was, sensibly in the Court’s view, agreed by Counsel for the parties that, save to the extent that the husband’s initial contribution of equity in the W property would render it inappropriate, the contributions otherwise made by the parties during the course of their 12½ year cohabitation should be regarded as equal to the date of separation. Subject to considering the impact of the decision of the High Court in Stanford v Stanford (2012) 293 ALR 70; [2012] HCA 52 (“Stanford”) which was delivered on 15 November 2012, given that sensible concession, it is unnecessary to refer in detail, or to make findings of fact with respect to most of what the parties were doing over the years of their cohabitation.
The contribution based entitlements of the parties as at the date of separation thus turn decisively upon the impact, in the light of their other intervening contributions, of the husband’s contribution of equity in W. The Court’s findings with respect to the work that had been done on the property by the husband by the date of the parties’ marriage assume significance in that context.
At the date of the marriage, the husband was engaged in work on the joint venture with State Forests at W, whilst the wife was engaged as a project officer earning a regular income. The husband was also share farming at the date of the marriage.
In October 1997 the parties’ purchased the property known as “R” as tenants in common in equal shares. The parties then occupied R, which was a rural property. The husband conducted farming and grazing operations on the property. Both parties were then in employment. R was acquired by utilising vendor finance on interest free terms for six months. W provided security for the acquisition of R, the vendor’s loan being re-financed through a bank within approximately a year of the property being acquired.
Although the parties do not agree, and ultimately nothing turns upon it, or was seriously sought to have turn upon it, each party received some financial assistance from family members during the years of their cohabitation.
As noted earlier, in May 2000 and May 2004 the parties’ children were born.
In June 2003, X Pty Limited was incorporated. The husband had, by that time, gained extensive experience in the road transport industry. The husband was the sole director of X Pty Limited.
In July 2003 X Pty Limited commenced a road transport operation, trading as “X Transport”. The husband became an employee of the road transport business.
In June 2004 AA Investments Pty Ltd was incorporated as trustee of the AA Investment Trust. The husband is the sole director of AA Investments Pty Ltd.
The Deed by which the AA Investment Trust was created provides that the beneficiaries of the Trust include the parties and their children The case has proceeded, sensibly in the Court’s view, on the basis that the AA Investment Trust is the property of the parties to the marriage or either of them (see Kennon v Spry (2008) 238 CLR 366 (“Kennon v Spry”)).
AA Investment Trust currently owns shares in X Pty Limited, the farming property “C” in central northern New South Wales, property at the Adelaide suburb F, and plant and machinery. The Trust operates a farming business at C and R.
In 2006 the wife purchased a business trading as “K Business” with funds made available by the AA Investment Trust.
The AA Investment Trust acquired a property at B in the Riverina district of New South Wales and other assets and licenses associated with a business conducted at that property at a total cost of approximately $225,000 or $245,000. Nothing turns on the correct figure. The following year the B interests were realised for $550,000.
The real property “C” was purchased by the AA Investment Trust in 2008 for $694,250 or $725,000. Nothing turns on which is the correct figure. The acquisition was completed with funds which had been borrowed for that purpose.
On 3 October 2008 the husband effected the sale of the W property for $1.6million. After payment of agent’s commission, selling costs and the costs of terminating the joint venture agreement with State Forests NSW, approximately $1,303,533 remained.
Controversy surrounds how the husband disbursed some of the proceeds of sale. It is not seriously in contest that $280,000 was utilised for the purchase of the property at suburb F in South Australia, and that refinancing the acquisition of “C” accounted for $725,000 of the net proceeds of sale of W. The wife’s contention is that the husband retained and failed to account for not less than $298,500 from the W sale proceeds. The husband contends that, in one form or another, the totality of the balance of the proceeds of sale of W have been accounted for, and at least to some extent, are represented by property which is currently available.
It is not controversial that the business “K Business” was not financially successful. The Court does not understand there to be any suggestion that its failure was referrable to any acts or omissions on the part of the wife. To the extent that the husband may make such allegations, the evidence does not provide a sufficient basis for so finding.
It is not in doubt that, in the post separation period, the husband caused funds to be made available to or on behalf of “K Business” until it ultimately ceased to operate, in February 2012.
In March 2010 the M Education Trust was created by Deed (see Exhibit H3). The husband is the trustee of the M Education Trust. The M Education Trust is a discretionary trust. The deed creating the trust provides that the primary beneficiaries are the husband and the parties’ two children. The power to appoint was vested in the husband by the deed which created the trust. Sensibly in the Court’s view, the case has proceeded on the basis that the M Education Trust is the property of a party to the marriage, the husband (see Kennon v Spry).
It is common ground that the M Education Trust holds listed stocks and shares with a current value of $1,267,461. Controversy surrounds how the acquisition of that portfolio was funded. In essence, the husband asserts that funds from the net proceeds of W, which could not have exceeded $300,000, and an $800,000 loan facility obtained from the NAB in June 2010 provided the funds for the acquisition.
As with the balance of proceeds of sale of W, the wife disputes that the husband has adequately or accurately accounted for the fate of the $800,000 which he obtained from the NAB.
On 10 December 2010 the wife purchased property at S Street, Town D for $260,000. A mortgage was obtained from Westpac Bank for $200,000. The balance of the purchase price of the S Street property was obtained from the wife’s family. The parties disagree as to whether the wife owes her family more than the $50,000 approximately which was directly referrable to completing the purchase of the property.
In July 2011, the wife obtained a $20,000 loan to repay business debts of “K Business”. As noted earlier, “K Business” ceased to trade in February 2012. Some assets of the business remain in the wife’s possession, the wife’s evidence ultimately being that “there’s probably $10,000 worth of stock left and it’s stored in my garage, and it was very left over items that couldn’t be sold in a shopfront and so I will probably take them to a market”. (Transcript 15 August 2012, page 71 lines 22-24)
The proceedings were conducted, sensibly in the Court’s view, on the basis that the assets of the trusts and corporations referred to above were the “property” of the husband. So doing creates no difficulty if the husband pays the wife any entitlement she is concluded to have, and retains those entities. If, however, the wife is awarded a payment of more than $530,000, and the husband moves to liquidate the corporations, the position is less straight forward.

credit

Credit does not assume significance in the determination of the proceedings. Both parties impressed as honest witnesses. Whilst the accuracy of the recollection of the wife was challenged with respect to the state of W at the date of marriage, the Court does not understand her evidence to have been seriously challenged in other respects, save possibly in relation to her alleged indebtedness to family members. The Court does not consider that the latter issue assumes significance in the determination of the proceedings.
The husband’s recollection of the state of W at the date of the marriage was seriously challenged, as was the veracity and accuracy of his evidence with respect to the utilisation of approximately $300,000 of the net proceeds of sale of W and $800,000 by loan from the NAB in 2010.
Whilst, in addressing those issues, more detailed reference will necessarily be made to the husband’s evidence in cross-examination in relation to those topics, and accepting that, in relation to the state of W as at the date of marriage, the husband could be expected to now seek to maximise the work which he had done on the property up to that time, the Court perceives no rational basis for declining to accept the substance of the husband’s evidence in relation to either of the contentious issues agitated in cross-examination of him.

the property of the parties to the marriage

On 15 November 2012, whilst judgment in this case was reserved, the High Court delivered judgment in Stanford. There has not been any application to make further submissions as a result of the High Court’s decision. The Court has considered inviting Counsel for the parties to make further submissions in the light of the High Court’s judgment, but has not done so. As these reasons hopefully confirm, on the findings of fact made by the Court, nothing said by the majority in Stanford appears to have the potential to impact upon the outcome of this case. To have invited further submissions, or re-listed the matter for that purpose would, in the Court’s view, have potentially, materially added to the parties’ costs, but, with all due respect to learned Counsel, not have materially assisted in determining the case, or promoting the broader interests of justice.
In Stanford French CJ, Hayne, Kiefel and Bell JJ said in relation to proceedings for settlement of property pursuant to s 79 of the Act, which the current proceedings undoubtedly are:
37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. ...
The property “R” which is owned by the parties as tenants in common in equal shares is agreed to be worth $650,000. Both parties seek to alter the legal and equitable interests in “R” by transferring the wife’s interest in it to the husband.
The parties agree that the wife’s property at S Street, Town D is worth $260,000. The parties agree that the property is encumbered to Westpac Bank in the sum of $194,073. Neither party seeks to alter the legal and equitable interest of the wife in the S Street property, although each seeks to have it taken into account in determining applications to alter interests in other property, albeit each does so in different ways.
The wife asserts she owes the estate of Ms T $104,133 which is substantially, if not entirely, referrable to the acquisition of that property.
The husband seeks to exclude from the balance sheet, both the S Street property and the liability of the wife in relation to it. The Court accepts, on balance, the evidence relied upon by the wife in relation to the liability to the T estate, and is unable to find that the wife will not be required to re-pay the liability. The wife has not drawn capital from, or against the assets of the marriage in the post separation period which she could have contributed to the acquisition of the S Street property. The husband has been able to do so, albeit most of his drawings have been accounted for. The Court accordingly proposes including both the S Street property and the liabilities attaching to it, albeit so doing results in negative equity.
The joint memorandum of experts Mr P and Mr N dated 20 July 2012 suggests that nothing remains of the assets of “K Business”. The husband contended however in final submissions that the sum of $24,246 should be included on the basis that such figure was the value of the assets of “K Business” as at the date upon which the expert’s valued the husband’s interest in the AA Investment Trust and other relevant entities. The wife on the other hand, as recorded earlier, gave evidence that she had $10,000 with respect to stock remaining after the business ceased to trade.
The attraction of adopting “like for like” is compelling in relation to this issue, particularly as including $24,246 for the plant and equipment has little impact on the balance sheet of the parties’ property.
The wife discloses modest investments, not exceeding $3,400. The husband also discloses, albeit smaller, balances in bank accounts. Given the time which has elapsed between the parties’ separation and the hearing, and the reality that both parties have been earning income and/or had access to capital during this time, the Court does not propose to include those sums in the balance sheet.
Similar observations apply to the wife’s jewellery ($387), and the wife’s personal credit card debts.
The husband owns transport equipment which is not otherwise included in the valuation of the parties’ property, or the entities which hold such property. The only reliable evidence (the report of H Valuers dated 23 January 2012) establishes a figure of $38,000.
As recorded earlier, the M Education Trust has shares worth $1,267,461. The AA Investment Trust owes the husband $550,693. It also owes the wife $18,296.
As recorded earlier, the C property and the property at Adelaide suburb F are owned by the AA Investment Trust, as is a substantial proportion of the plant equipment and machinery utilised by X Transport for the purpose of conducting its road freight business.
The parties disagree as to the value of the husband’s shares in X Pty Limited, the wife asserting a figure of $22,386, the husband a figure of $31,287. The parties also disagree in relation to the value of the AA Investment Trust, the wife asserting $226,273, the husband $128,520.
As the submissions of Counsel for the husband suggest:
1.(a)The source of this dispute relates to the values contended by each of the parties to machinery, trucks and plant and equipment owned by those entities. In the circumstances of this matter, the Husband contends that auction value is appropriate, whereas the Wife appears to contend that the value should be determined upon the basis of market value in continuing use. [Outline of Submissions on behalf of Respondent Husband: 1-2, par 1(a)]
In a helpful memorandum which was jointly tendered by Counsel for the parties and became Exhibit “Y”, Mr P, an experienced and well qualified chartered accountant, provided expert opinion evidence in the proceedings, and co-authored the first joint experts report with Mr N, also an experienced and well qualified accountant, on 20 July 2012, and a subsequent joint expert report with, another accountant, Mr O on 16 August 2012.
Mr P was not cross-examined on the contents of Exhibit “Y”. In it, Mr P suggested three different figures with respect to the value of the assets of the AA Investment Trust as they emerged from the differences of opinion with respect to the value of plant and equipment owned by AA.
Mr U prepared a valuation of plant and equipment in July 2012 on behalf of the wife. The plant and equipment referred to in such valuation was regarded by Mr U as being worth $1,698,000 “for continuing use (GST exempt)”.
On 1 December 2011 Mr Y prepared a valuation of substantially the same plant and equipment on behalf of the husband and expressed the view that its market value was $1,529,000 and that its “orderly liquidation value” was $1.2million.
Subsequently, on 30 August 2012 (see Exhibit “W7”), Mr U identified what he concluded to be the essential differences between his methodology and that of Mr Y, and the implications of those differences in terms of their respective valuations. Mr U recorded in his memorandum:
In researching my report I have;
·contemplated sales consummated (including auction),
·contemplated advertised units for sale
·spoken to dealers of the items including those with units for sale
·spoken to wholesalers of the items.
With this information I have formed an opinion as to the Market Value for Continuing Use (the value to the party, should the assets continue to be used within the business) of the assets.
In contrast to Mr [Y’s] report which contemplates the value of the units if sold into the market, my report contemplates a premium to Market Value that the party enjoys as part of the continuing use of the assets within the business. This Continuing Use or value to party premium comprises:
·signage (this is seen as a negative to the market value and a positive to the continuing use party)
·registration and stamp duty (any second hand truck or trailer bought in the second hand market attracts at least 3% stamp duty to the buyer)
·costs to locate and purchase
·any modifications necessary
·knowledge of the units to the party, service issues, spare parts issues, reliability.
Whilst the premium allowed varies depending on the asset, as an average I allowed 5% of the Market Value.
Mr U acknowledged that it was agreed between himself and Mr Y on 18 July 2012, when the experts conferred, that the values of plant and equipment compiled in their individual reports fit within the range of values expected given the differing definitions of value contemplated, and the different dates of the valuation reports.
In their joint memorandum dated 18 July 2012 Mr U and Mr Y also recorded:
Mr [Y] valued the assets on the basis of Market Value and Auction and Mr [U] valued the assets on the basis of Market Value For Continuing use. Whilst these bases are similar, both valuers agreed that they will derive different results. It was agreed that the results will necessarily be different because:
·Market Value represents an individual sale of the assets on an ad hoc basis
·Market Value takes no account of the value of the signwriting on the vehicle which is seen as a disadvantage at individual sale of the vehicles outside of the business
·Market Value For Continuing Use takes into account the value of the cost of acquiring a fleet and which has a known history
·Both parties agree that the valuations differ not only due to the points above but also due to the fact that truck and trailer fleets are highly depreciating assets and the valuation of the truck and trailer assets are almost 15 months apart
Mr [U] argues that Market Value for Continuing Use is the appropriate basis of value for the assets because in applying the concept of “value to the party”, the highest and best use of these assets is employed in the business’ of [X] Pty Ltd and [AA] Investments Pty Ltd.
Mr [Y] agrees that should the business’ of [X] Pty Ltd and [AA] Investments Pty Ltd be viable then Market Value For Continuing Use is the appropriate basis of value however Mr [Y’s] instructions specified Auction Value and Market Values.
Both values agree that the values ascribed to assets at the differing points in time and on the different basis’ are fundamentally correct.
Mr U and Mr Y were, sensibly in the circumstances, briefly cross-examined on the last day of the trial. In the course of cross-examination of him, Mr Y accepted that it was appropriate that he “opine a value that takes into account the most advantageous purpose for which the plant and equipment is to be adopted or used” (transcript of 21.09.2012, page 13, lines 6-8). Mr Y readily and properly accepted that proposition.
Cross-examination of the experts revealed:
MR CAMPTON: And, therefore, you take into account and opine as to a valuation for the highest and best use?
MR [Y]: Correct.
MR CAMPTON: And do I take it for the purposes of formulating that opinion regard is had by you to every element of – that that plant equipment possesses?
MR [Y]: In all, yes, in most circumstances for sure.
MR CAMPTON: Right, and when you’re considering each element of the plant and equipment insofar as they increase the value to the specific owner of the plant and equipment, that’s part of you considerations?
MR [Y]: I’m sorry, could you just say that again, please?
MR CAMPTON: Yes, as part of your considerations, do you take into account each element relating to the plant and equipment as a specific value to the owner of that plant and equipment?
MR [Y]: I do in as far as my instructions instruct me to do.
[Transcript of 21.09.2012, page 13, lines 12-32]
The following exchange also revealed:
MR CAMPTON: Mr [Y], is it your opinion that if you were to give a value for the most advantageous purpose for this plant and equipment you would adopt Mr [U’s] values?
MR [Y]: I would agree that if I had been instructed to value the equipment in a continued use or for continuing use that our valuations would not have been a great deal different.
MR CAMPTON: Right, and just so I can clarify that answer, is it that you would be valuing it, that is, valuing the plant and equipment by way of what’s known as the value to the owner?
MR [Y]: Well, I mean, my definition for continued use value is that it is currently being used in an organisation, which it is, and obviously there are parts involved in the value of that item, such as sign writing, for example, of which these units didn’t really have too much in the way of sign writing. There’s obviously in a continued use basis if you had to replace that item tomorrow you would have to pay a little bit more obviously than if you, at my valuation, determines it from a buyer that’s not overly compelled. So in a market value situation we’re saying that it’s at an arm’s length and without compulsion whereas in a continued use valuation realistically the buyer would obviously need it a lot quicker.
MR CAMPTON: Taking into account the most advantageous purpose for which this plant and equipment is used, would a factor such as knowledge about the particular plant and equipment, its history, its service, the availability of spare parts and reliability again be something that you would take into account as part of that highest and best use?
MR [Y]: That’s in fact taken into account in the market valuation, in a fair market valuation so it’s certainly not taken into account in other forms of valuing but in a market valuation it certainly is.
MR CAMPTON: Would you agree that any modifications to the plant and equipment would be an additional matter that you would have to take into account over and above what you’ve called the market value when you’ve been opining – when you’re giving an opinion as to the highest and best use?
MR [Y]: I – it would do in assets such as in this matter though I can’t really see anything that could be done. I mean, realistically they’re prime movers and realistically they’re refrigerator Pantex, both of which are freely available on the open market and I didn’t see anything there that had been modified in opinion to suit the particular task.
[Transcript of 21.09.2012: page 14, lines 37-47 and page 15, lines 1-28]
During the course of the cross-examination of Mr Y, to which Mr U was privy, the Court asked:
As I listen to it and you can see Mr [M] says the premium for the six dot points he identifies in his letter of 30 August 2012, as I read it, is an average of about five per cent across the board. Mr [Y], I don’t think, disputes that. What he says is well, if you sold these in the market place this is what you would be likely to get. I don’t know that Mr [U] disagrees with that. He says, well they’re worth more to [the husband] to hang on to than to do that with. Gentlemen, is that a broadly accurate summary of what emerges from your reports?
[Transcript of 21.09.2012: page 16, lines 13-20]
To the Court’s considerable relief, Mr U replied:
I think you’ve hit the nail on the head with that.
[Transcript of 21.09.2012: page 14, lines 34-36 and page 16, line 22]
In brief cross-examination of Mr U and Mr Y, the following exchange ensued:
MR HODGSON: In the event that the assets were to be realised, Mr [Y] has referred to an orderly liquidation estimate. Would that be equivalent, Mr [Y], to an auction value estimate?
MR [Y]: They’re very similar valuations, yes. I mean, the main difference there is normally when we’re referring to an auction value we refer to it as being in the auctioneer’s rooms, whereas an orderly liquidation is normally referred to as an on site type sale.
MR HODGSON: And in the event that there was to be – and this is a question to both of you. Perhaps if Mr [Y] goes first and then Mr [U] goes second. In the event that these assets were to be realised, would it be the case that that would be most likely done by selling them at an auction?
MR [Y]: In normal circumstances I would suggest so, yes.
MR HODGSON: And, sorry, Mr [U]?
MR [U]: I would suggest that would be at the court’s discretion as to how much time [the husband] had to come up with the funds necessary to satisfy the court, but if the timeframe was, you know, three to six months well I think the market value would be achievable. A period of less than three months, well then I think you would be looking at more of an orderly liquidated value.
MR [Y]: Again, I would agree with that statement.
MR HODGSON: Yes. So, Mr [Y], you agree with that?
MR [Y]: Yes, in that situation I didn’t take into account the court’s orders, so it would depend obviously on the timeframe of the funds being required.
As each of Mr U and Mr Y readily, and properly acknowledged, the real difference of opinion in relation to their valuations stems not from any differences in their expert opinions of the chattel values of plant and equipment, but rather from the underlying assumptions which each of them was asked to accept.
The principle of highest and best use with respect to valuation of property and the authorities which refer it was discussed in Grieves & Grieves [2012] FamCA 691 where the Court said:
31.The principle of “highest and best use” finds repeated expression throughout the authorities relevant to the valuation of real property (see Spencer v The Commonwealth (1907) 5 CLR 418, Brisbane City Council v The Valuer-General for the State of Queensland (1978) 140 CLR 41, Housing Commission of New South Wales v San Sebastian Proprietary Limited & Others (1978) 140 CLR 196, Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1981) 146 CLR 336 and The Valuer-General v Fenton Nominees Proprietary Limited (1982) 150 CLR 160).
32.Judicial acceptance of the concept is said to derive from the decision of the High Court in Spencer v The Commonwealth (1907) 5 CLR 418 where Isaacs J said (at pages 440-441):
... of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. … To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property. ...

The principle of “highest and best use” was succinctly stated by Pullin J in Flotilla Nominees Pty Ltd v Western Australian Land Authority & Anor (2003) 129 LGERA 65:
18. … The test of market value is well known. It is what the hypothetical purchaser desiring to purchase the land would have had to pay for it on the date of resumption to a hypothetical vendor willing to sell it for a fair price but not desirous to sell: Spencer v Commonwealth (1907) 5 CLR 418.
19. Regard must be had to every element of value which the lands possess. Every such element must be taken into consideration insofar as they increase the value to the owner of the land: Minister of State for Home Affairs v Rostron (1914) 18 CLR 634 at 637. In short, regard should be had to the highest and best use of the subject land, meaning the most advantageous use of the subject land having regard to planning and all other relevant factors affecting its present and future potential: Adelaide Clinic Holdings Pty Ltd v Minister for Water Resources (1988) 65 LGRA 410 at 415.
As the decision in Adelaide Clinic Holdings Pty Ltd v Minister for Water Resources (1988) 65 LGRA 410 confirms, the issue is not which approach produces the highest valuation, but the approach which reflects the highest and best use of the property. Determining the “highest and best use” will often be influenced by any significant difference with respect to the resultant valuations. That is consistent with the notion of a hypothetical vendor not disregarding the “ordinary business consideration” of obtaining as much as can reasonably be gained for the property. As the authorities confirm, “highest and best use” is generally controversial when a change from existing use to a more beneficial use gives rise to a higher rather than to a lower valuation. In this case, the issue is potentially the reverse.
Whilst Counsel for the husband, in concluding submissions, sought orders for the sale of various assets, including those valued by Mr U and Mr Y, in the event that the husband was ordered to pay the wife more than $530,000, there was no suggestion that the assets valued by Mr U and Mr Y would otherwise be realised within an immediate or short-term time frame (see Rosati and Rosati (1998) FLC 92-804 and Brett-Hall and Brett-Hall (2006) FLC 93-276). If and when the whole of the plant and equipment is to be liquidated, the valuation of it would become academic in any event, as the Court would, in making orders to implement the substantive property settlement determined by it to be just and equitable, provide for a percentage division of the realised proceeds of sale of relevant assets after payment of realisation expenses and any contingent liabilities, such as Capital Gains or other tax, which might be triggered as a consequence of such realisation.
In Federal Commissioner of Taxation v St Helens Farm (ACT) Pty Ltd (1980) 146 CLR 336 Mason J said:
... As with the assessment of damages, especially in personal injury cases, the valuation of property by a court has many of the characteristics of a discretionary judgment. Valuation is a matter of estimation, not of precise mathematical calculation. It certainly involves the making of a value judgment in the metaphorical as well as the literal sense.
…
Essentially valuations are estimations involving findings of fact and discretionary judgment made the evidence given in the individual case and by reference to the circumstances of that case. To apply slavishly the approach taken by a judge in another case, to apply the same discount or capitalization rate that he applied, as if that rate had the force of a general rule, is to attribute to them the force that should be confined to propositions of the law.
In Mallet v Mallet (1984) 156 CLR 605, at page 627, Mason J said:
There is always the risk that in examining methods of valuation attention is diverted from the object of the exercise, namely the ascertainment of the real value of the shares, to the means by which the object is to be achieved.
The Court considers that it is more appropriate to approach the valuation of AA on the basis that the relevant asset values are the higher “continuing use” figures asserted by Mr U, and reflected in the first column of Mr P’s calculations in Exhibit “Y”. Whilst valuations may be determined by reference to hypothetical sales, the Court does not understand there to be any impediment to having regard to the value to the holder, of assets which are unlikely to be sold in an immediate or foreseeable sense, albeit so doing should be, and is in this case, informed by reference to what a Spencer v The Commonwealth (1907) 5 CLR 418 exercise reveals. The value of the plant and equipment to AA is the “object to be achieved” in this case.
To the extent that there is controversy, it is, in the Court’s view, preferable to have regard to Mr P’s valuation of the interest in X Transport, thus the sum of $22,386 should be accepted. Not insignificantly, in his concluding submissions, learned Counsel for the husband did not suggest any basis upon which Mr P’s figure should not be accepted.
Similar observations apply to Mr P’s valuation of AA of $226,773, each of these figures resulting from the adoption of Mr U’s valuation of relevant plant and equipment.
It is not contentious that legal fees paid by the husband prior to 30 June 2011 of $19,115 should be included in the balance sheet.
Counsel for the wife urged the Court to add back $100,000 by way of funds asserted to have been retained and inadequately accounted for by the husband after superannuation. In his written submissions in support of so doing, Counsel for the wife made a series of submissions with respect to the post separation period, and the funds which the husband had during that period, and was asserted to have failed to have adequately accounted for in relation to that period.
As foreshadowed during the course of oral submissions on 21 September 2012, the Court prefers to have regard to what the evidence reveals with respect to contributions in the post separation period than to add back the pragmatically “bald amount of $100,000” which Counsel for the wife submitted to be appropriate, or any other essentially arbitrary sum. Given that the submissions in respect of the add back sought on behalf of the wife will necessarily be considered in some detail in the context of evaluating the post separation period, and that the Court considers it is in that context that the interests of justice and equity are more likely to be served than by what is acknowledged to be a necessarily arbitrary add back, the Court will not engage further with these submissions in the context of the balance sheet.
So far as liabilities are concerned, the Court has earlier recorded the liabilities of the wife with respect to S Street. The Court accepts, to the extent that it may be controversial, that the wife is indebted to her mother in the sum of $17,995, as she alleges. The husband disputes that such sum should be included on the basis that, as with the wife’s Westpac personal loan, “these liabilities relate solely to the wife’s expenditure and were incurred after the time of separation”. (Outline of Submissions of on behalf of Respondent Husband: 2, par 1(d)).
The Court prefers not to include those liabilities on the basis that, although they are real, and were incurred in the post separation period, having regard to what occurred in the post separation period, during which it is not in doubt that the husband had access to substantially greater funds generated during and subsequent to the parties’ cohabitation than did the wife, considering them in the assessment of the post-separation period is more conducive to a just and equitable determination of the parties’ entitlement than is including current personal liabilities, which have not been shown to have a relevant connection with the marital relationship, in a case where the parties separated more than four years ago.
The Court proposes including the liability with respect to “K Business” of the wife of $31,271, save that such sum should be reduced by a further $5,000 in the light of the wife’s evidence. Having included the value which the entity once had, but no longer has, this approach has a fairness which is difficult to dispute.
The husband sought the inclusion of Capital Gains Tax (“CGT”) payable in the event of a sale of the Adelaide property, which had effectively been deferred by reason of the property having been acquired as a result of the roll over of the proceeds of sale of the B property. The figure in that regard is not in doubt, and, if it is properly be taken into account, is agreed to by Mr P and Mr O in their joint memorandum of 16 August 2012 (see Exhibit “X”).
The experts have recorded that they disagree essentially because:
2.7[P] is of the view that any capital gain will be difficult to quantify and then if it is quantified, may not be taxable.
2.8The quantification of any capital gain will be difficult because
a. We are unaware of the selling costs of the property
b. We are unaware of any improvements to the property after 30 June 2011, and
c. If a distributable capital gain was somehow determined in [AA] we are unaware of the taxation position of the beneficiaries of the trust, and whether they have any income or capital losses brought forward to offset any gain distributed.
2.9[P] is of the opinion that even if the capital gain was recorded or the property sold, then the tax would be minimal if any at all. [Joint memorandum of Mr [P] and Mr [O] of 16 August 2012: pars 2.7-2.9]
The basis upon which Mr [P] formed his expert opinion was articulated in some detail.
Whatever the Court concludes, it is readily apparent that the issue is not simple or clear-cut. Mr O’s opinions were encapsulated in the following paragraphs:
2.11[O] advises that the capital gains tax information in the affidavit was provided in order for it to be known that there was a potential taxation consequence should the assets have to be realised.
2.12[O] is of the opinion that should the property have been realised at 30 June 2011, the deferred capital gain would have had no taxation consequences due to the fact that due to the trust had carried forwarded losses at 30 June 2011. However, depending on the future trading circumstances of the trust, these losses may be utilised for other purposes. If this occurs the capital gain stated in my affidavit could still arise.
2.13[O] is also of the opinion that it is difficult to look at these issues in isolation. Mr [P] has rightfully pointed out that [the husband] may look at utilising other Small Business Capital Gain concessions to minimise taxation consequences at the time of the gain, however there are a lot of assumptions to be made around this, which may be inaccurate depending on circumstances at the time. [Joint memorandum of Mr [P] and Mr [R] of 16 August 2012: pars 2.11-2.13]
The Court is not persuaded on the balance of probabilities that the roll over Capital Gains liability from the B property will materialise, or do so within a time which can be found with confidence, and accordingly will not, at the balance sheet stage, include that sum. That however, for reasons which have been referred to earlier in the context of plant and equipment, is not necessarily determinative of the issue. If, as the husband has foreshadowed will occur in the event of his being required to pay the wife more than $530,000, assets are realised, the formulaic approach to the division of the proceeds of sale of realised assets, after deduction of actual and contingent liabilities which then exist or materialise will cure the difficulty in any event. Even if there are no sales of assets which give rise to a CGT, the Court can, by formulaic order provide that the parties share any CGT liability which does materialise in relation to the B sale in accordance with their overall entitlements (see Jarrott & Jarrott [2012] FamCAFC 29 and Jarrott & Jarrott (No.2) [2012] FamCAFC 72).
The superannuation interests of the parties are not controversial and, it was agreed at the commencement of the trial, would be included in the asset pool. So finding is not inconsistent with authority (see Coghlan v Coghlan (2005) FLC 93-220).
Set out below, in table form, are the Court’s conclusions with respect to the net property of the parties to the marriage.

Jointly owned assets
1.	“R” property	$650,000
Property of the Husband
Assets
1.	AA Investment Trust	$226,273
2.	Shares in X Pty Ltd	$22,386
3.	Transport equipment	$38,000
4.	M Education Trust	$1,267,461
5.	Debt owed by AAInvestment Trust	$550,693
6.	Paid legal fees	$19,115
7.	Superannuation interest	$76,670
Total	$2,200,598
Liabilities
1.	NAB share loan account	$650,892
Total net assets of husband		$1,549,706
Property of the Wife
Assets
1.	S Street Town D	$260,000
2.	K Business	$24,246
3.	Debt owed by AA Investment Trust	$18,296
4.	Superannuation interest	$69,532
Total	$372,074
Liabilities
1.	Westpac mortage	$194,073
2.	Estate of Ms T	$104,133
3.	K Business loan	$26,271
Total	$324,477
Total net assets of wife		$47,597
Total net assets of the parties		$2,247,303

preliminary assessment of “just and equitable”

As is not in doubt, the Court may not make an order altering interests in property unless it is satisfied that “in all the circumstances, it is just and equitable to make the order” (s 79(2)). Since the decision of the Full Court in Hickey and Hickey (2003) FLC 93-143 the justice and equity of proposed orders for alteration of interest in property has been considered after, and largely in the light of, the Court’s conclusions with respect to s 79(4) and s 75(2) of the Act. The recent decision of the High Court in Stanford raises doubt as to whether the “four step” approach remains permissible, and, if it does, how the requirements of s 79(2) are addressed.
In Stanford the majority said that the “question” posed by s 79(2) is:
37. ... whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
For the reasons articulated earlier, that question can be answered in the affirmative. In this case, it is not a question of whether a property settlement order is just and equitable, but what order is just and equitable.
The second “fundamental proposition” to which the majority in Stanford referred was that:
39. ... whether it is “just and equitable” to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist.
In this case, no such assumptions are required, or at risk of being made, as both parties seek that their interests in their marital property should differ from their current interests, albeit they disagree in relation to the consideration which the husband should provide in order to acquire the wife’s interest in that property, or pay her for the loss of the opportunity to share in marital property owned by the husband in the future.
The majority in Stanford also said:
40. ... the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
41. ... The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage. (Footnote removed)
Although the logic of doing so prior to evaluating relevant s 79(4) and s 75(2) factors, may be questionable, the Court is comfortable to record by way of preliminary conclusion that it would be just and equitable to alter the parties’ interests in their property. Some matters in support of so concluding have been suggested above. To not alter the parties’ interest in at least the manner, and to the extent sought by the husband would be unjust and inequitable. Whether altering the parties’ interest to the extent sought by the wife would be just and equitable requires further consideration, by reference to ss 79(4), 75(2) and 79(2) of the Act.

contributions

As recorded earlier, sensibly, Counsel for the parties agreed that, save with respect to the impact upon the contribution based entitlements of the parties to the date of separation, of the husband’s initial contribution of the W property, the parties’ overall contributions should be seen as equal. The evidence before the Court renders that approach commendable, and involving no inappropriate concession by either party. Were it necessary to do so, the Court would make findings on the evidence in the terms Counsel for the parties suggest.
There are three issues with respect to the husband’s initial contribution. The first is the quantum of that contribution. That topic is controversial. The second is the use that was made of the property. That topic is not controversial. What became of the proceeds of sale of the property is controversial, and assumes significance in the evaluation of post separation contributions. The third issue, having regard to the impact of the husband’s initial contribution of W, in the light of the parties’ other contributions between that date and separation, is the impact that the contribution should have on the entitlements of the parties.
The submissions of Counsel for the parties in relation to this issue accurately encapsulate the dispute.
On behalf of the husband it was submitted:
2. The initial contribution made by the Husband at the commencement of cohabitation and in particular:-
(i)the value of his interest in livestock and plant equipment.
(ii)the value of his interest in the property situated at [W].
(iii)the amount of his cash savings.
[Submissions of Respondent Husband 21 September 2012: 2-3, par 2]
The evidence before the Court does not reliably establish (see par 110 of annexure “G” of the husband’s affidavit filed 7 August 2012) the value of the husband’s livestock, plant and equipment as at the date of the parties’ marriage. Nor does the evidence accurately establish (see page 5 of annexure “C” of the husband’s affidavit filed 7 August 2012) that the husband’s savings so substantially exceeded those of the wife as to assume significance (see annexure “H” of the husband’s affidavit filed 7 August 2012).
As the course of evidence at trial, and the submissions of Counsel for the parties make clear, the property of quantifiable significance which the husband brought to the marriage was his interest in W. As recorded earlier, when acquired on 26 May 1995, the husband borrowed virtually the totality of the purchase price of W. It is not in doubt that, by the date of the parties’ marriage, W was worth significantly more than the husband paid for it, whatever the husband had done to the property by that time. The evidence does not establish that the mortgage over the property had by then been significantly reduced.
It was submitted on behalf of the husband:
3. The Husband contends that the acquisition conservation and improvement of the [W] property provided the financial platform for the parties to achieve their present asset position.
4. By virtue of the joint venture agreement with State Forest of NSW the Husband was awarded the contract to prepare the property for planting. He asserts that he had cleared the majority of the property by the commencement of cohabitation. As well as acquiring his interest in the property for below its value, he derived a significant income in clearing it, which brought about its increase in value. [Submissions of Respondent Husband 21 September 2012: 3, pars 3-4]

Although, in the light of the High Court’s decision in Stanford, doing so may no longer be an appropriate, or even permissible, approach, the Court proposes “standing back” from its preliminary conclusion in order to determine the justice and equity of it (see Manolis & Manolis (No.2) [2011] FamCAFC 105). In the circumstances of this case so doing involves consideration of an issue which was squarely agitated at trial.
As is obvious, the wife will receive “risk free” funds, whilst the husband will retain assets which comprise a significant component of trading enterprises, each of which has, and will continue to have, a significant and ongoing element of risk. To ignore those realities in the context of s 79(2) would be naïve (see Elsey and Elsey (1997) FLC 92-727). The Court considers that the orders it proposes reasonably accommodate this factor.
It is readily apparent that the sum to which the Court concludes the wife is entitled (approximately $900,000) exceeds the $530,000 payment which the husband’s Counsel submitted should be the upper limit of an award in the wife’s favour. In those circumstances, Counsel for the husband seeks orders for sale and division of the parties’ property. On instructions from him, the husband’s Counsel expressly disavowed any enthusiasm for an order for instalment payments.
This issue is not without complexity, both with respect to s 79(2) of the Act, and in the broader context of the orders which the Court should make. As Counsel for the wife’s submissions clearly articulate, the evidence does not establish that the husband could not, particularly if he had the benefit of time to meet his obligations, satisfy the award which the Court is inclined to make in the wife’s favour, without the necessity to sell any real estate or plant and equipment “owned” by him.
It is clear beyond doubt that liquidation of the business assets of the husband would be to the financial detriment of both the husband and the wife. The detriment for the husband would be greater than for the wife, given that the Court has concluded that he is entitled to a greater percentage of the parties’ net assets than is the wife.
The Court is satisfied that, if the husband were required to pay $600,000 within three months, and the balance of the wife’s entitlement thereafter, as to $200,000 within 12 months, and the balance within 12 months thereafter, that would not either disadvantage the wife, given that interest would be payable on the outstanding balances of her entitlement from time to time, and that the husband’s enterprises would not require liquidation. There seems no reason why, were he minded to, the husband could not extinguish the whole of his obligation to the wife by selling shares held by the M Education Trust.
The Court is persuaded that an instalment order is just and equitable. Counsel for the wife has had the opportunity to be heard in relation to such an order. The Court however cannot force such a proposal upon the husband, particularly in circumstances where the husband has clearly stated that he does not wish to avail himself of such an opportunity.
If the wife assigns to the husband the debt owed to her by AA Investment Trust ($18,296), and transfers her interest in R to the husband, the husband would owe the wife $925,803. The Court proposes that such sum be paid by the husband:
(a)as to $600,000 within 90 days of the Court’s orders;
(b)as to $200,000 within 12 months of the Court’s orders;
(c)as to $125,803 within 24 months of the Court’s orders.
Interest on each of the second and third payments would accrue as and from 90 days from the date of the Court’s orders. An interest rate favourable to the husband, but not unfavourable to the wife would be appropriate, 1 per cent above the prime rate being likely to be a lower rate then the husband would obtain in the market, but higher than the wife might obtain on deposit.
In the circumstances, and accepting that it is a less than perfect conclusion of the matter, and in the absence of what appears any other fair way of finally disposing of the matter, the orders of the Court will be that the husband pay to the wife within 3 months the sum of $925,803 provided that, if the husband so elects within that time, such sum may be payable as to $600,000 within 90 days and the balance on the basis indicated above.
In the event of the husband not paying the sum of $600,000 within three months, either party may apply for orders to give effect to the substantive judgment of the Court. That may well involve the joinder of additional parties, issues of the rights and entitlements of third parties who are minors, the appointment of liquidators, making of orders pursuant to the Corporations Act 2001 (Cth), and triggering of contingent and other taxation liabilities, the cost of which would be very substantial for the parties.

I certify that the preceding two hundred and ten (210) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman delivered on 10 December 2012.

Associate:

Date: 10.12.2012