Miratos & Miratos
[2025] FedCFamC2F 821
•17 June 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Miratos & Miratos [2025] FedCFamC2F 821
File number(s): MLC 10399 of 2020 Judgment of: JUDGE O'SHANNESSY Date of judgment: 17 June 2025 Catchwords: FAMILY LAW – Final Property Alteration Orders – Marriage of 8 years until separation – 6 years of contributions prior to marriage – Disparate initial contributions – Weight to be given to gifts and/or inheritances when considering section 79(4) contribution – One party seeks s 79(4) contribution assessment of 85/15 – Other party seeks s 79(4) contribution assessment of 50/50 – Difficulty with the parties organising appropriate evidence for trial – Where one party alleges “double shift” contribution – Where one party seeks to retain the farm and pay out the other party and other party seeks orders for sale of all/most assets – Dispute as to form of default of payment provisions in orders – Dispute as to whether payment to departing party should be fixed by reference only to agreed pool or whether actual sale proceeds and likely capital gains tax should be taken into account – Whether the party seeking to retain the farm should have up to one year to fund property settlement – Whether party to receive payment should leave farm immediately or upon receipt of property settlement – Whether parties should be responsible for drafting of default provisions of orders after determination and reasons delivered – Where neither party provided evidence of extent of potential capital gains tax – Orders for 80/20 division would not be just and equitable – Orders for 50/50 division would not be just and equitable – Party seeking to retain farm should have up to 6 months to fund property settlement – Party to leave former matrimonial home when property settlement received – s 79(4) contribution assessed at 72.5/27.5 – s 75(2) adjustment of 3% – Division of assets 69.5/30.5 – Party retaining farm to have 6 months raise payment before default provisions take effect – Orders made for a payment calculated on basis of a 31/69 division of property and for parties to bring in draft orders as to default of payment provisions and for default of payment provisions to take into account selling costs and any taxes arising from sale. Legislation: Evidence Act 1995 (Cth) ss 140
Family Law Act 1975 (Cth) ss 75(2), ss 79, ss 79(2), ss 79(4), ss 80 & ss114AB
Cases cited: Benson & Drury [2020] FamCAFC 303
Blass & Blass [2022] FedCFamC1A 63; (2022) FLC 94-085
Clauson & Clauson (1995) FLC 92-595
Dickons & Dickons [2012] FamCAFC 154
Fields & Smith (2015) FLC 93-638
Fox v Percy (2003) 214 CLR 118
Gosper& Gosper [1987] FLC 91-818
Guthrie & Guthrie (1995) FLC 92-647
Hickey and Hickey and the AG for the C’lth of Australia (2003) FLC 93-143
Hobson & Hobson (2020) 61 Fam LR 557, [2020] FamCAFC 251
Hoffman & Hoffman (2014) FLC 93-591
Holland & Holland (2017) FamCAFC 166; (2017) FLC 93-798
Horrigan & Horrigan [2020] FamCAFC 25
Hurst & Hurst (2018) FLC 93-851
Jabour& Jabour [2019] FamCAFC 78
Keskin & Keskin and Anor (2019) FLC 93-932
Kessey and Kessey (1994) FLC 92-495
Lee Steere & Lee Steere (1985) FLC 91-626
Lovine & Connor and Anor (2012) FLC 93-515, [2012] FamCAFC 168
Mallet v Mallet (1984) 156 CLR 605, (1984) FLC 91-507
Phillips & Phillips (2002) FamCA 350, (2002) FLC 93-104:
Phipson & Phipson [2009] FamCAFC 28
Rosati v Rosati (1998) FLC 92-804
Stanford v Stanford [2012] HCA 52; (2012) FLC 93-518
Teal & Teal [2010] FamCAFC 120
Trask & Westlake(2015) FLC 93-662
Varnham & Moses (2021) FLC 94-007
Wallis & Manning (2017) FLC 93-759
Wayne & Wayne [2010] FamCAFC 33
Division: Division 2 Family Law Number of paragraphs: 288 Date of hearing: 29 July 2024 to 1 August 2024 Place: Melbourne Counsel for the Applicant: Mr Puckey SC Solicitor for the Applicant: Lander & Rogers Counsel for the Respondent: Dr Ingleby Solicitor for the Respondent: Forte Family Lawyers ORDERS
MLC 10399 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MIRATOS
Applicant
AND: MS MIRATOS
Respondent
ORDER MADE BY:
JUDGE O'SHANNESSY
DATE OF ORDER:
17 JUNE 2025
THE COURT ORDERS THAT:
Final Property Orders
Definitions
1.For the purposes of these Orders, the following words/phrases have the meaning as set out below:
(a)‘B Street property’ means the real property situate at and known as B Street, Town C in the State of Victoria being the whole of the land more particularly described in Certificates of Title Volume … Folio …, Volume … Folio …, Volume … Folio … and Volume … Folio ….
(b)‘B Street mortgage’ means National Australia Bank Ltd mortgage number … registered upon the title to the B Street property.
(c)‘D Street Property’ means the real property situate at and known as D Street, Town C in the State of Victoria being the whole of the land more particularly described in Certificate of Title Volume … Folio …;
(d)‘Miratos Group’ means the following businesses, corporate entities and trusts collectively:
(i)The business of Mr Miratos as sole trader (ABN … ) (Mr Miratos Sole Trader) – operating under the name “E Pty Ltd”;
(ii)E Pty Ltd (ACN …) (E Pty Ltd), a company which traded until October 2021 and which was operating a farm retail and accommodation business named “F Business”;
(iii)G Pty Ltd (ACN …) (G Pty Ltd), a company which commenced trading in FY2022 and which now operates a farm retail and accommodation business named “F Business”;
(iv)H Pty Ltd (ACN …) (H Pty Ltd) as a company in its own right and in its capacity as the trustee of the Mr Miratos Property Trust established by Deed dated May 2004 and which is the registered proprietor of the D Street property;
(v)The Mr Miratos Property Trust established by Deed dated May 2004 (Mr Miratos Property Trust); and
(vi)J Pty Ltd (…) (J Pty Ltd) a company which is the registered proprietor of the B Street property.
(e)‘J Pty Ltd shares’ means the two ordinary shares held by Mr Miratos in that company.
(f)‘E Pty Ltd shares’ means the 1 A class share and 1 ordinary share held by Mr Miratos and the 1 B class share and 1 ordinary share held by Ms Miratos in that company;
(g)‘G Pty Ltd shares’ means the 12 ordinary shares held by Mr Miratos that company;
(h)‘H Pty Ltd shares’ means the 2 ordinary shares held by Ms Miratos that company;
(i)‘B Street property contents’ means all furniture, contents, objets d’art and personal property situate in each of the 2 residential buildings on the B Street property;
(j)‘D Street property contents’ means all furniture, contents, objets d’art and personal property situate in the residential building on the D Street property;
(k)‘Plant and Equipment’ means all plant, equipment, motor vehicles, machinery and improvements owned by any entity comprised in the Miratos Group, including but not limited to the plant and equipment identified and valued by Mr K of L Company in his expert report dated 17 December 2023 (Mr K's report) and all items located at the D Street property other than the D Street property contents;
(l)‘Water Licences’ means all water licences held by Mr Miratos and/or any entity comprised in the Miratos Group including but not limited to all licences identified in Mr K’s report;
(m)‘Sheep’ means all sheep owned by Mr Miratos, Ms Miratos and/or any entity comprised in the Miratos Group including but not limited to all sheep identified in Mr K’s report;
(n)‘Business Stock’ means all business stock owned by Mr Miratos and/or any entity comprised in the Miratos Group including but not limited to all business stock identified and valued in Mr K’s report;
(o)‘Husband’s bank accounts’ means any and all bank accounts held in Mr Miratos’ sole name.
(p)‘Wife’s bank accounts’ means any and all bank accounts held in Ms Miratos’ sole name.
(q)‘Wife’s part property settlement’ means the payment of $50,000 to the Wife pursuant to the orders of 10 February 2021 and the payment of $100,000 to the Wife pursuant to the orders of 25 February 2022 (a total of $150,000);
(r)‘Husband’s shares’ means any shares in any public company registered in Mr Miratos’ sole name including his shares in M Company and N Company;
(s)‘Wife’s shares’ means any shares in any public company registered in Ms Miratos’ sole name.
(t)‘Husband’s superannuation entitlements’ means all superannuation entitlements held by Mr Miratos with N Company or any other superannuation fund;
(u)‘Wife’s superannuation entitlements’ means all superannuation entitlements held by Ms Miratos with Super Fund 1, Super Fund 2 or any other superannuation fund.
Payments
2.On or before 4.00 pm on 17 December 2025 (‘the Date’) the Husband pay to the Wife the total sum of $1,790,643.00 (‘the Total Payment’) by way of two payments as follows:
(a)on or before 4.00 pm on 17 November 2025, the sum of $100,000.00 (‘the First Payment’); and
(b)on or before 4.00 pm on 17 December 2025 the sum of $1,690,643.00 (‘the Second Payment’); and
(c)no later than contemporaneously with the First Payment, the Wife notify the Husband, in writing, of her intended time and date of vacating the D Street property; and
(d)no later than contemporaneously with the payment of the Total Payment, the Wife:
(i)vacate the D Street property; and
(ii)notify the Husband in writing that she has done so; and
(iii)do all things, sign all documents and give all necessary instructions required to withdraw at her expense any and all caveats lodged by her or on her behalf upon the title to B Street property and/or the D Street property.
3.That contemporaneously with the Total Payment, order 2 of the orders of 10 February 2021 (the payment to the Wife of $300 per week maintenance) be discharged.
4.That for the purposes of these orders:
(a)The Husband retain for his sole use and benefit absolutely all his personal right title and interest in each of the entities comprised in the Miratos Group including his J Pty Ltd shares, his E Pty Ltd shares and his G Pty Ltd shares;
(b)The Husband retain for his sole use and benefit absolutely all his personal right title and interest in the Plant and Equipment, the business stock, the Water Licences, the Sheep, the B Street property contents, the Husband's bank accounts, the Husband's shares and the Husband's superannuation entitlements;
(c)There be a declaration that as between the parties, the Husband be solely entitled to all of the assets of each of the entities comprised in the Miratos Group including but not limited to the B Street property, the D Street property, the Plant and Equipment, the business stock, the Water Licences, the Sheep, any and all trademarks owned by E Pty Ltd or H Pty Ltd, the B Street property contents, the Husband's bank accounts, the Husband's shares and the Husband's superannuation entitlements;
(d)That the Wife deliver to the Husband and that he thereafter retain for his sole use and benefit absolutely the following items of personal property comprised in the D Street property contents and that thereafter the Wife retain the remainder of the D Street property contents for her sole use and benefit:
(i)Dining table and chairs;
(ii)King bed suite, two matching side tables with drawers, dressing table with mirror;
(iii)Custom made outdoor 3-seater; and
(iv)Old wooden bench seat
with the Wife to be restrained pending such delivery from selling, transferring, disposing of or otherwise dealing with such items.
(e)That within 28 days the Wife do all things, sign all documents and give all necessary instructions required to:
(i)Transfer all E Pty Ltd and H Pty Ltd shares held in her name to the Husband;
(ii)Resign as a director and from any other position of office in any entity comprised in the Miratos Group;
(iii)Assign to the Husband all her right, interest or entitlement to any loan or loan account in her name in any entity comprised in the Miratos Group;
(iv)Authorise and direct the release of the remaining balance of all funds held pursuant to all previous interim orders in these proceedings in the Husband's solicitors' controlled monies account upon trust for the parties to the Husband for his sole use and benefit
(f)The Wife otherwise further retain for her sole use and benefit absolutely the Wife's bank accounts, the benefit of the Wife's part property settlement, the Wife's superannuation entitlements and Motor Vehicle 1 registered number … in her possession (Motor Vehicle 1), with the Husband within 21 days to do all things and sign all documents required to transfer Motor Vehicle 1 to the Wife at her expense;
Indemnities
5.Save as expressly provided by these orders, the Husband in his personal capacity and in his capacity as a director, shareholder or other office bearer of any entity comprised in Miratos Group be solely liable for and indemnify and/or cause the Miratos Group to indemnify and keep the Wife indemnified Wife with respect to:
(a)The B Street mortgage;
(b)All liabilities arising in respect to any real or personal property retained by the Husband pursuant to these orders;
(c)Any and all taxation liabilities of the Husband and/or the Miratos Group;
(d)Any and all personal loans, lease or credit card liabilities in the Husband's sole name and all other personal liabilities of the Husband howsoever arising;
(e)Any and all further liabilities of the Miratos Group;
(f)Any and all personal liability of the wife for any loan (in her sole name or jointly with any other person) pursuant to which she is indebted to any entity comprised in the Miratos Group;
General Provisions
6.Unless otherwise specified in these orders and save for the purposes of enforcing the payment of any monies under these or subsequent orders:
(a)Each party be solely entitled to the exclusion of other to all other property (including choses in action) in the possession of such party at the date of these orders;
(b)Monies standing to the credit of the parties in any joint bank account are to become the property of the Husband, with the parties to do all acts and things to close any joint accounts thereafter;
(c)Each party forgo any claims they may have to any superannuation benefits and/or other work-related benefits or entitlements belonging to or earned by the other;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)Each party shall pay and be solely responsible for their respective credit card liabilities (if any) without adjustment;
(f)The parties each hereby release the other from any and all liability in respect of any debt or other claims alleged to be owed by one to the other.
7.The Husband and the Wife have general liberty to apply in relation to the implementation and/or enforcement of these orders.
Costs
8.Any application for costs be made by short written submissions via email to the Chambers of Judge O’Shannessy (…@...) on or before 28 days after the date of these orders and, in the event any party seeks an order for costs, the other party make a short written response via email to the Chambers of Judge O’Shannessy (…@...) within 14 days of receipt of such an application.
Default Provisions
9.The parties confer as to appropriate provisions of these orders to apply in the event either party does not, or is unable to, comply with these orders and bring in an agreed minute of proposed default provisions, and unless such provisions are agreed in writing with 28 days, then;
(a)The Husband file and serve by email to Chambers the default provisions he seeks together with any necessary written submissions not exceeding two (2) pages; and
(b)Within 14 days thereafter, the Wife file and serve by email to Chambers the default provisions she seeks together with any necessary written submissions not exceeding two (2) pages
Further and other orders
10.That save for Order 2 ($300 per week maintenance) of the orders of 10 February 2021 and the requirement to bring in draft orders as to any default of the parties with these orders, all extant interim and/or interlocutory orders and all applications of the parties for property settlement, alteration, adjustment or declaration of property interests, spousal maintenance and/or other financial relief be otherwise dismissed and the Husband be released from any and all previous undertakings with respect to the use and occupation of any of the real property held by the Miratos Group.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE O’SHANNESSY
INTRODUCTION
Having separated after a relationship of at least 14 years,[1] the applicant husband, Mr Miratos (‘the Husband’) and the respondent wife, Ms Miratos (‘the Wife’), being unable to reach agreement, seek a decision of this Court to divide or adjust their property pursuant to section 79 of the Family Law Act 1975 (Cth) (‘the Act’). The major assets of the parties are their interests in agricultural land, equipment, livestock and produce, sheds, retail and entertainment facilities and three dwellings thereon (‘the Farm’), and the businesses conducted thereon and modest superannuation.
[1] The Wife asserts a marriage-like relationship of 17 years, and the Husband asserts that relationship was 14 years.
The Husband is aged 61 years (almost 62) and the Wife 57 years. The parties did not have children together. They met in 2001 and commenced an exclusive intimate relationship at some point thereafter. The parties were engaged to be married in 2002. The Wife alleges the parties cohabited from 2002 and the Husband alleges they cohabited from late 2004. They married in 2010 and separated under the one roof in about September or October 2018,[2] and the Husband was removed from the former matrimonial home (‘FMH’) [3] on 23 August 2020 when an Intervention Order was made and served on him.
[2] The Wife asserts separation under one roof on 28 September 2018 and the Husband asserts that happened on 29 October 2018 and nothing turns on that dispute.
[3] And the land and dwelling of the FMH is referred to herein as the ‘FMH Block’.
Each party seeks very different property orders pursuant to Part VIII of the Act and each says that the orders he or she seeks are just and equitable as required by section 79(2) of the Act. The Husband seeks there be property alteration orders to divide the asset pool 80/20 in his favour based on an assessment of respective section 79(4) contributions of 85/15, with a section 75(2) adjustment of 5% to the Wife, bringing the overall division to 80/20 to the Husband. The Wife seeks an almost immediate sale of the bulk of the assets and an equal overall division of the parties’ non superannuation assets based on an assessment of overall contribution of 50/50, with a fixed payment to her based upon the agreed at trial asset pool. The Wife says the Court should leave the parties’ modest superannuation as it is, notwithstanding the Wife has 1 ½ times the superannuation of the Husband.
The Wife continues to live in the dwelling that became the FMH and the Husband now lives nearby on the farm in a modest dwelling (‘the Cottage’), that was previously occupied by his mother[4] (from when she moved out of the FMH in early 2005) until her health declined and she moved from the Farm to live with one of her daughters in 2018. The Wife continues to live in the dwelling that became the FMH and the Husband now lives nearby on the Farm in a modest dwelling (‘the Cottage’), that was previously occupied by his mother[5] (from when she moved out of the FMH in early 2005) until her health declined and she moved from the Farm to live with one of her daughters in 2018. She died in 2022.
[4] Ms O had lived in the big house (that became the FMH) for many years until in early 2005 moving to live in the much more modest dwelling on the Farm (‘the Cottage’) after it had been renovated. When Ms O moved to the cottage it meant the FMH was available to the Husband and the Wife and their children.
[5] Ms O had lived in the big house (that became the FMH) for many years until in early 2005 moving to live in the much more modest dwelling on the Farm (‘the cottage’) after it has been renovated. When Ms O moved to the cottage it meant the FMH was available to the Husband and the Wife and their children.
Conclusion
For the reasons set out hereafter, I have determined that the section 79 of the Act property settlement to the Wife should be by the application of a division of the pool of assets in the proportions of 30.5% to the Wife and 69.5% to the Husband. That will require, as explained later in these reasons, a total payment to the Wife in the sum of $1,790,643.00 and the total payment to be made on or before 17 December 2025. Unless agreed otherwise, the total payment should be made up of a first payment of $100,000.00 on or before 17 November 2025 to facilitate the Wife organising her future accommodation and moving out of the FMH, and the remainder of the payment to be made on or before 17 December 2025.
The assets for division
The assets for division fall into 4 categories (set out later in more detail):
·The Farm:[6] Being the parties’ interests in the trusts that own the land and improvements described herein as ‘the Farm’. The Farm is really in two parts, the J Pty Ltd part, being the bulk of the Farm land and improvements, and the H Pty Ltd part being the FMH Block that also includes some Farm land. Each of those companies is the trustee of a trust, discussed later; and
·The Businesses: Being the interests of the parties in the companies and businesses that operate on the Farm (‘the Businesses’). The businesses are also really in two parts. A company (for the purpose of these reasons referred to as ‘Post-Separation E Pty Ltd’) and the part conducted by the Husband in his own name, also discussed later. Essentially, the Businesses consist of stock and equipment (valued at then current market rates) and the substantial debt owed to the bank and finance companies. The single expert accountant valuer treated that debt as belonging to the Businesses, and the parties adopted that approach. The extent of that debt, which is secured over the Farm land, means that the Businesses have a substantial negative value; and
·The part property settlements the parties have received during the litigation (‘the Part Properties’); and
·The parties’ modest superannuation (‘the Superannuation’).
[6] The Wife seeks the sale of all of the Farm and the FMH.
Neither party sought a superannuation splitting order and there was no dispute as to the amount of superannuation.
Relevant contributions start from when?
Although, I am satisfied, the parties should not be regarded as “living together” or “co-habiting” until they lived together in the same house in late 2004, the Wife ceased her previous employment in August 2003 and commenced working full-time, and more, in the Businesses then conducted by the Husband at that time. She was paid a wage that was applied to her own bank account. But in May 2004, the Wife was appointed as the sole shareholder and director of H Pty Ltd, the new entity that did not trade, but was (within a few days) the trustee of the fixed trust where the Husband was the sole beneficiary, and that trustee held the FMH block from when the Husband’s mother and brother, Mr P, later transferred that property to that trust. And it is not disputed that from late 2004, the Wife was significantly involved, in many roles, in the Businesses previously conducted by the Husband and it was conceded she took on a serious role/s in those businesses during the relationship.
The Husband asserts that he continued to conduct the Businesses and in many serious roles at all material times had the major role in the Businesses. The Husband had worked on his parents’ farm, or farms, then owned by his parents or entities owned or controlled by his patents, from his teenage years. Hence for the purposes of this case I regard the parties’ contributions, relevant to the orders I must make, as commencing in May 2004 when the parties were already engaged to be married and spending substantial time at each other’s homes, and the Wife was working in the Businesses.
Those important, but not burdensome, appointments demonstrated the parties’ commitment to future lives together and the Wife’s significant role in the Husband’s affairs. For those reasons, I am satisfied that the parties’ contributions should be had regard to from that date. That is, not “late 2004” as asserted by the Husband or “2022” as asserted by the Wife, but from May 2004,[7] until separation under the one roof, 14 years later, and also since then.
[7] See Kowalski & Kowalski (1993) FLC 92-342 as authority for a statement of the settled law that all contributions by a party, before and during and after a marriage relationship are regarded as referable to the marriage and to be taken into account pursuant to section 79(4).
Parties’ corporate roles
The roles the parties played in the companies and trusts that own the Farm and the Businesses are said to be significant. On legal advice, the business and corporate affairs of the Husband and his family (his mother Ms O and brother Mr P) were reorganised over 2003 and 2004.
J Pty Ltd & the ‘Farm Unit Trust’ & the Farm
The majority of the value of the asset pool is contained in the land and improvements registered in the name of a company, and in these proceeding common ground, as trustee of the Farm Unit Trust.
J Pty Ltd
Back in 1985, that is about five years after the Husband commenced to work on the Farm, then effectively owned by his parents, as it then was, a company (for the purposes of these reasons referred to as ‘J Pty Ltd’[8]) was incorporated. J Pty Ltd was, and is, the trustee of a unit trust (for the purposes of these reasons referred to as ‘the ‘Farm Unit Trust’). J Pty Ltd was, since long before the relationship between the Husband the Wife, the registered proprietor of the Farm land.
[8] The names of the companies, trust and partnerships as referred to in these reasons referenced to the actual names are as set out in Appendix 3 to these reasons.
At all material times from before the relevant relationship of the Husband and Wife the Husband was one of three directors of J Pty Ltd[9] and, I infer, one of three equal shareholders, with his brother Mr P and Mother Ms O. And from November 2009[10] the Husband has been the sole director and shareholder of J Pty Ltd.
[9] See the uncontroversial assertion in the Wife’s trial affidavit at [18.7].
[10] As uncontroversially advised by senior counsel for the Husband at Transcript p 21 line 10 and the historical search of that company at MSM-6, page 101 of 235.
The Farm Unit Trust
In these proceedings it was uncontroversial that J Pty Ltd held the land as trustee of the Farm Unit Trust and that unit trust was settled many years before the relationship of the Husband and Wife.[11] The Farm Unit Trust had five units. At some point prior, the Husband, his brother Mr P, his sister Ms Q and sister Ms R and their Mother, Ms O, held one unit each. At some point, between June 2002 and November 2009, the unit that was held by Ms R was transferred to Ms O.[12]
[11] The “Settlement Agreement” dated 4 February 2013, and in evidence as MSM-14 to the Wife’s reply affidavit, that resolved the Supreme Court of Victoria proceedings brought against J Pty Ltd as trustee of the Farm Unit Trust and others, recites that the Farm Unit Trust was established on 13 May 1985. This was not controversial.
[12] The Wife alleges, at [18.7] of her trial affidavit that at the start of the relationship as she saw it, in 2002, Ms O had 2 units. The Wife did not describe Ms R as holding any, and this was not disputed. The balance sheet of the Farm Unit Trust for FYE 2022 describes one unit each being held by Ms O, and each of the Husband, Mr P, Ms R and Ms Q. However, nothing turned on just when Ms O obtained Ms Q’s unit. She never claimed or received any benefit at any time material to this case.
The inference I draw from the evidence and the manner in which the unit holders dealt with their units, is that for some time since prior to when the Husband and Wife commenced to live together, the Husband’s sisters, Ms Q and Ms R, had not played any significant role in J Pty Ltd or the Farm Unit Trust or the Farm, nor did they receive any benefits therefrom.
For some time prior to the parties’ relationship, and thereafter, the Husband held one of the units, or 20% of the units in that unit trust. J Pty Ltd holds, as trustee of the Farm Unit Trust, and has held from many years before the relationship of the Husband and Wife, the bulk of the land, in area and value, upon which the Businesses operate. From 2009 the Husband held four of the five units in the Farm Unit Trust in his name. That is, the unit he had previously held and the units previously held by Ms R, Ms O and Mr P. It is clear Ms R’s unit was transferred to Ms O at some stage and prior to November. However, nothing turned on just when Ms O obtained Ms Q’s unit. She never claimed or received any benefit at any time material to this case.
In 2013, as discussed later, the fifth unit was transferred to him by Ms Q, but the gist of the Husband’s case is that from some years earlier, and November 2009 at the latest, he had effectively inherited and was entitled to that fifth unit.
Trouble with Ms Q, the Supreme Court litigation & the fifth Unit
It is apparent from the order of the Supreme Court made in late 2011[13] and the “Settlement Agreement” settling those proceedings dated early 2013,[14] that in 2010[15] Ms Q (as Plaintiff) issued a writ (seeking that she have the benefit or fruits of the registration in her name of 20% of the units[16] of the Farm Unit Trust) against the Defendants, J Pty Ltd (the trustee of the Farm Unit Trust), and Ms O, Mr P and the Husband. I infer[17] that Ms R had already transferred her unit to Ms O by this stage, and I infer by at least November 2009. It is also apparent and clear enough that the Defendants counterclaimed against Ms Q to the effect that she did not have any beneficial interest in the Farm Unit Trust and/or the Farm, being the land registered in the name of J Pty Ltd, whether or not the Farm Unit Trust owned the land and/or whether or not the trustee J Pty Ltd owned the land in its own right.
[13] Annexure MSM-13 to the Wife’s affidavit.
[14] Annexure MSM-07 to the Wife’s affidavit.
[15] And the Wife’s Outline of Case uncontroversially asserted September 2010.
[16] The Wife’s Outline of Case uncontroversially asserts the proceedings were to “remove and replace” the Trustee of the Farm Unit Trust.
[17] The deed to care for Ms O and Mr P dated November 2009 and in evidence as MSM-07 to the Wife’s reply affidavit describes Ms O as transferring her “units”, not unit, to the Husband. And the 2010 Supreme Court proceedings, MSM-13, did not include Ms R as a Defendant, only the trustee J Pty Ltd, the Husband, Mr P and Ms O.
From that litigation and the manner in which the fifth unit was transferred to the Husband, and what I was told uncontroversially from the bar table, I infer that as between her siblings and Ms O on the one hand and Ms Q on the other, it was disputed between those parties whether Ms Q held her unit beneficially for herself or whether (it being alleged she had received substantial funds from Ms O and her father years ago) she had no remaining beneficial interest in that unit and/or the assets of the Farm Unit Trust.
The fifth unit transferred to the Husband
There are three events in that litigation of relevance in this case. Firstly, the issue of the writ by Ms Q in 2010. Secondly, the hearing and decision,[18] in late 2011, of the dismissal of Ms Q’s summons seeking summary judgment on a significant legal and factual issue in those proceedings. Thirdly, the settlement contained in the “Settlement Agreement” concluding those proceedings, executed in early 2013, that provided for Ms Q’s unit to be transferred to the Husband and for Ms Q to abandon all and any claim to that unit and/or the land and/or assets of J Pty Ltd and/or the Farm Unit Trust without further consideration. Those events are not controversial in these proceedings. It is common ground that the Wife utilised her skills and energy, including the skills honed in her previous working life in a professional’s office, in assisting the Defendants in the litigation, including appearing and making submissions on the hearing of that summons on behalf of the Defendants.
[18] The Order of late 2011 being in evidence as MSM-13 to the Wife’s affidavit.
The importance of the Wife’s role in those court proceedings brought by the Husband’s sister, Ms Q, that were settled with the “Settlement Agreement” is a significant dispute in this case.
As at the start of the relationship between the Husband and the Wife, the Farm Unit Trust was not encumbered by bank or external debt, but the Unit Trust was substantially indebted to the Husband’s parents who had purchased the land many years earlier and, I infer, effectively lent the purchase price of the land to the unit trust. That land, including substantial improvements, makes up about 82% of the pool of assets now available to the parties. But the business of the Husband was substantially in debt to a bank and that debt was secured over one of the three blocks, or titles, of the farmland owned by the Farm Unit Trust.
As at the start of the relationship, the Husband owned one unit, or 20% of the units, in the Farm Unit Trust. By the end of 2009, four of the five remaining units had been transferred to the Husband or agreed to be so transferred.[19] In February 2013, the remaining fifth was agreed to be transferred to the Husband and along the way the substantial debt due to the Husband’s parents from the trustee and the unit trust was forgiven or abandoned. Along the way, in late 2009 (but funds received in January 2020), the trustee, effectively the Husband, borrowed $600,000, and $500,000 of that was paid to a creditor of the Husband’s brother, Mr P (his ex-wife).
[19] The agreement between J Pty Ltd, the Husband, Ms O and Mr P is regarded by the parties in these proceedings as being executed in November 2009 and uncontroversially the Wife alleges at [56] of her trial affidavit that Ms O and Mr P formally transferred the units they held soon after in January 2010.
E Pty Ltd
In September 2004,[20] a company (for the purposes of these reasons referred to as ‘E Pty Ltd’) was registered with the Husband as sole director and he and the Wife were each 50% shareholders.[21] From about then until about October 2021 (that is about a year after the Husband was removed from the FMH), E Pty Ltd conducted part of the substantial businesses on the Farm. The Wife’s role as a shareholder of E Pty Ltd began only 4 months after she commenced to work full time in the Businesses.
[20] See [33] of the Wife’s trial affidavit.
[21] They each held one “ordinary” share, the Husband held an “A class” share and the Wife held a “B class” share but in these proceedings the parties did not differentiate between the A class and B class shares and treated the parties as each having a 50% shareholding.
Prior to that business being incorporated, the Husband traded and conducted business on his own account, in the same type of business as E Pty Ltd and continued to do so thereafter.
H Pty Ltd and the FMH Fixed Trust
In May of 2004, as part of that reorganisation, a fixed trust (for the purposes of these reasons referred to as ‘the FMH Fixed Trust’) was established with the Husband as the sole beneficiary and with a company (for the purposes of these reasons referred to as ‘H Pty Ltd’) the trustee of that Trust. The Wife accepted appointment as the sole director and sole shareholder of H Pty Ltd on incorporation in May 2004. So, from May 2004, the Wife was the sole director and sole shareholder of the company that was the trustee of a fixed trust, where the Husband was, and is, the sole beneficiary. The FMH Fixed Trust holds, and has held since May 2004, the small in area, but valuable, part of the Farm where the newer house (also the FMH from 2005) is situated.
At the time of the settlement of the FMH Fixed Trust, the land of that trust was unencumbered (and remains unencumbered) and the roles of sole director and sole shareholder did not involve the Wife taking on the risk of any personal indebtedness.
The Wife continues to live in the FMH. She seeks orders that it be sold, along with the other real properties in the pool of assets, and that she be entitled to live in the FMH until the property settlement is effected.
Post Separation E Pty Ltd
From about October 2021, that is in the financial year end 2022, the Husband conducted the major part of the Businesses on the Farm through another company (for the purposes of these reasons referred to as ‘Post-Separation E Pty Ltd’), where he was the sole director and shareholder.
The single expert business valuer, Ms S, valued the parties’ interests in those two companies, E Pty Ltd and Post-Separation E Pty Ltd, together, that is on a consolidated basis.[22] That much was not controversial.
[22] See Appendix 1 & 2 and [4.3] of Ms S’s report.
The 2009 look after Ms O & Mr P agreement/s
Related to the parties’ corporate roles are the three November 2009 formal agreements. Annexed to the Wife’s affidavit[23] are an agreement, dated November 2009, and an associated deed document. The November 2009 agreement sets out the sale of all of the units[24] held by the Husband’s mother, Ms O, in the Farm Unit Trust to the Husband and/or nominee. Per that agreement, consideration paid for the sale was $1.00 as well as the purchaser entering into the Deed as annexed to that agreement. That Deed includes the following:
[23] MSM-7 beginning at page 74 of the Wife’s reply affidavit.
[24] “Units” plural not “unit”.
…
[Ms O]’s Needs
4.5 The parties acknowledge that the predominate reason that [Ms O] has agreed to transfer the units in the Trust to [Mr Miratos] and the Interest in the Partnership to [Mr P] is the assurance provided by [Mr Miratos] and [Mr P] that they will look after her wellbeing including but not limited to the following subject to [Ms O] requesting the same and at no cost to [Ms O] whatsoever:
(a)preparation of all meals (including dietary requirements advised by a qualified medical practitioner);
(b) regular weekly cleaning of the house on the property including the surrounding gardens;
(c) providing transport to and from medical appointments as needed;
(d) providing transport to and from any place requested by [Ms O] for the purpose of shopping, visiting friends and family and any other reasonable purpose;
(e) provision of daily laundering service;
(f) assistance with dressing, showering and/or bathing and personal hygiene;
(g)assistance with medication as directed by a qualified medical practitioner;
(h) assistance with any banking, payment of accounts and any other personal affairs;
(i)any other assistance requested by [Ms O] for her general advancement of life and wellbeing.
The Deed further provides for equal responsibility between the Husband and Mr P for outgoings, structural repairs, extension and renovation for Ms O’s home, at Ms O’s request.
The agreement/s, said to be dated November 2009, include a deed of dissolution of the partnership between Ms O and the Husband (as the partners retiring from the partnership) and Mr P (as the continuing partner). This document gives effect to the sale of Ms O’s shares by transferring all interest in the partnership to Mr P as the sole continuing partner.
It is common ground that despite the Husband and Ms O retiring as partners, Mr P’s creditors continued to make demands, and the Husband and/or the Businesses paid substantial sums, more than another $500,000 over some years to Mr P’s, or the partnership’s, creditors.
THE PARTIES’ COMPETING CASES
In outline of case, the Wife asserted that the net of debt non-superannuation property pool is valued at approximately $7,526,000, and in outline of case the Husband claimed that the net of debt non-superannuation pool is valued at approximately $6,725,000.
Extent of the pool finally agreed
By the end of the case, it was accepted[25] and common ground that the non-superannuation pool of assets should be regarded as set out at Annexure B to the Husband’s outline of case: that is to the value of $6,725,000 net of debt. This also avoided apparent double counting in the Wife’s schedule of asset and liabilities. It is common ground that between them, the parties have about $154,000 of superannuation.
[25] Counsel for the Wife sensibly urged the putting aside of de minimus items and pithily agreed to an approach of, “concentrate on the steak, not the peas”.
The Husband’s property case
Until separation, the parties conducted a farm, a retail business and accommodation business on land that, for the purpose of these reasons I will describe as ‘the Improvements Block’. The Farm land can also be described as three proximate to each other pieces of land with different activities and improvements on each. From separation until trial, the Wife lived on the land that I will describe for the purpose of these reasons as ‘the FMH Block’ which includes the FMH and some farm sheds. Following separation, the Husband lived in a caravan on the Improvements Block, but at a time prior to the trial, the Husband had moved to the Cottage on the Improvements Block where the Husband’s mother had lived from 2005 until about 2018 (after the under one roof separation).
The Husband’s case is that the total non-superannuation pool is around $6,725,000 with superannuation of $154,000, and that much was common ground by the end of the final hearing. He seeks to be assessed as contributing, in the section 79(4) of the Act sense, 85% and the Wife 15% to that pool of assets. He seeks a further 5% adjustment for section 75(2) factors in the Wife’s favour, on account of the substantial asset disparity between the parties at the end of the section 79(4) contribution assessment, with an overall adjustment of 80/20 between the parties of the non-superannuation assets. To effect such a split, the Husband seeks that he pay the Wife a cash sum of $1,345,138. Taking into account the $200,000 already paid to the Wife by way of part property settlement, the Husband says he should be required to pay the Wife $1,145,138 and retain the Businesses and the Farm, if he is able to do so.
The Husband’s case in opening was put as follows:
MR PUCKEY: He seeks an opportunity to raise a settlement to pay out the wife. The wife joins issue with the percentage appropriately and that will be an issue for your Honour. But what the wife seeks to do is to have your Honour simply bypass giving my client any opportunity to raise her settlement. It’s not in dispute that she doesn’t want to retain the farming assets or the business assets. She just wants a cash settlement. My client agrees with that. He wants an opportunity to raise it. He will do so by a combination of borrowing from the NAB and, in all likelihood, sacrificing or selling farming assets.
The Husband’s case was that the Farm had all come to the parties from his parents and so should be regarded as a significant and overwhelming contribution[26] by him. His case asserted that each of them had also contributed, or brought into the relationship, a home in a suburb nearby to the Farm.
A year to pay and Wife to leave immediately
[26] Where these reasons use the term “contribution” that means contribution within section 79(4)(a), (b) & (c).
The Husband places considerable weight on section 79(4)(d) of the Act to the effect that, while conceding his desire to retain the Farm should not reduce the Wife’s property settlement, as the Farm has been his income all his working life, the orders should be structured so as to give him a reasonable opportunity to retain it. Hence, he submits, he should have up to a year to pay the settlement to the Wife and that in the meantime she should leave the FMH on the Farm as this would help him obtain the borrowing that would fund the property settlement and best advance the prospect of him retaining the Farm.
The Husband’s case is that at the start of his relationship with the Wife, or soon after, he owned his 20% unit holding in the Farm Unit Trust, and his share of a farming partnership with Mr P and his mother, Ms O, and soon after in 2004 he inherited or was given his beneficial interest in all of the FMH Fixed Trust. Further, as at June 2002, the land of the Farm Unit Trust was only encumbered by the substantial debt, of $1,249,907 to the Husband’s parents.[27] And the land, including the substantial dwelling, of the FMH Fixed Trust (where he was the only beneficiary) was entirely unencumbered when he was given or inherited his interest in 2004. Further, he was already conducting the farm and retailing business. Plus, he says, he then owned his house in a nearby town (‘the Husband’s Town Property’), as did the Wife (‘the Wife’s Town Property’). Further, by the end of 2009, he had transferred to him Ms O’s two units in that trust, in return for an agreement to provide modest support and obtained the transfer of Mr P’s unit when he paid the $500,000 property settlement to Mr P’s wife that Mr P was unable to pay. Then, although Ms Q had not played any role in the Farm Unit Trust or received any income from it during the relationship of the Husband and Wife, the fifth unit from Ms Q was formally transferred to the Husband in 2013.
[27] See MSM-3 of the Wife’s reply affidavit at p 51 of 235.
But the Wife presses for acknowledgement of two liabilities or obligations of the Husband as well as assets brought in or inherited by the Husband. The Husband acknowledges these, they being his debt to a bank (being the mortgage debt secured on his house in the nearby town) and the debt necessary to fund the property settlement with his former spouse resolved by court orders in February 2003. Because the Wife regards mutual section 79(4) of the Act contributions as commencing in 2002, she pressed that I regard the Husband’s property settlement as a pending liability at the start of the relevant relationship. The extent of the Husband’s debt to the bank mortgagee of his house (in town) when sold and settled in 2005 is controversial.
In May 2004, Ms O and Mr P transferred the land and dwelling of the FMH property, where Ms O then lived, to the trustee of the FMH Fixed Trust, effectively to the Husband.[28] The Husband asserts this was him effectively inheriting the land and dwelling of the FMH Fixed Trust at that time.
[28] The deed of transfer and settlement dated 11 May 2004 included the recital “D The transfer is solely as a result of the appointment of the Trustee as the Trustee of the Asset for the sole benefit of the beneficiary (the Husband)” and the operative provision, “4. The trustee must exercise all rights attaching to the asset in such manner as the Beneficiary (the Husband) shall direct and not otherwise.”
In addition, in 2009, the Husband and Mr P entered into the agreement with their mother, Ms O, who then already lived in the renovated cottage situated on the land of the Farm Unit Trust, whereby Ms O was to be cared for by the Husband and Mr P. As between the Husband and Wife it is common ground that the care of Ms O was largely undertaken by the Husband and the Wife.[29] The Husband asserts there was not that much to do because of Ms O’s independence and self-sufficiency, until about 2016 when she needed more care, and she then moved away altogether in 2018. And, he says, ‘we both looked after [Ms O]’.
[29] The November 2009 “Look after Ms O” agreement discussed above.
The trouble with Mr P
It is common ground that the Husband’s brother, Mr P, got into financial strife on two different but perhaps related fronts at the time, or soon after, the Husband and Wife commenced to live together in 2004. He had substantial personal and/or business debts that became problematic for him. He and his wife separated, and he entered into consent orders for a property settlement with his ex-wife in the sum of $500,000 in 2009. Apparently by family arrangement, Mr P operated his farming or business activities on land next to what became the FMH of the Husband and Wife and this was known, or can be for the purposes of this case, as ‘[Mr P]’s land’. Mr P, at least later on, lived in the big old house on the Farm owned by the Farm Fixed Trust.
The end result of these twin financial pressures on Mr P was that he could not fund the $500,000 he was obligated to pay his wife, and he could not meet his other creditors’ demands. Motivated by both legal and moral or family reasons, the Husband, but actually the Trustee of the Farm Fixed Trust, in late 2009,[30] borrowed $600,000 secured on the Farm land, and $500,000 (or thereabouts) was applied to fund the property settlement to Mr P’s former spouse and the balance to business purposes. At about the same time, the land previously owned by the Husband’s parents (and next to the FMH) was sold to pay Mr P’s creditors. That land was, I infer, treated as Mr P’s share of the Farm. And in early 2011,[31] Mr P was declared bankrupt.
[30] The Wife’s Outline of Case puts it at early January 2010, but nothing turns on that.
[31] See annexure MSM-3 and the recital ‘A’ to the order of the Supreme Court of Victoria made in late 2011.
Also, at some point proximate to the 2009 agreements, Mr P transferred his unit, or 20% of the units in the Farm Unit Trust, to the Husband. The Wife sought to characterise those events, and the $500,000 to Mr P’s spouse, and the more than $500,000 payments to Mr P’s creditors as consideration for that unit. The Husband did not accept that characterisation.
In addition, the Husband seeks that the Wife immediately vacate the big house on the Farm and that he have 12 months from my decision to make the necessary payment to the Wife. He also seeks a default of payment clause that would trigger a sale of at least part of the Farm and take into account the price achieved, sale costs and any taxation arising from sale. The Wife simply seeks a fixed payment to her in 60 days and, in default of payment, an immediate sale of the whole of the Farm without taking into account any sale costs or income tax arising from sale.
After separation, the Wife continued to work in the Businesses until April 2019, and from some time thereafter worked as a community worker before she was required to step away from her work to attend to her sick father. The Wife’s father passed away in 2023 and that loss weighs heavily on her.
The Husband’s other witnesses
The Husband’s evidence also included affidavits of two of his children, Ms T and Mr U, as well as an affidavit of his previous wife, Ms V (the mother of Ms T and Mr U ). By sensible and efficient agreement between counsel, it had been decided early in the trial that the criticisms and/or negative evidence put forth by either side in this case would not be relied upon. Consequently, the Husband’s ‘other witnesses’ as I will call them, Ms V, Ms T and Mr U, were not called for cross-examination, and none of the ‘negative or inflammatory assertions’ in their evidence were relied upon. As such, the evidence of the Husband’s other witnesses contends as follows.
Ms V
Ms V’s affidavit included evidence of the Husband’s personal nature and character, describing him as “an old-fashioned farmer” whose “major loves are his family, the land and his farm.”[32] Ms V’s evidence also emphasizes the Husband’s close relationship with his children, and commitment to helping to bring up the Wife’s daughter, Ms W.
[32] Affidavit of Ms V filed 26 June 2024 [7].
Ms T
Evidence adduced in Ms T’s affidavit purports to describe the family environment in the Husband and the Wife’s house. Ms T’s evidence included:
4.[Mr U], my other brother [Mr X] ([Mr X]) all worked part time from a young age. I had two jobs working at the [Town Y supermarket] from the age of 15 and then also took on shifts at a local cafe in [Town Y] when I was 18, working between both jobs.
…
7.[…] the [FMH] property was not difficult to run. It had oil heaters in bedrooms and a fire that my father would light every night. Once my brothers grew older, they took over this job. […]The hot water would sometimes go out on really windy days. This was not hard to light and once we were all of age, we all learnt how to do this. However, if it did go out, we would call my father and he would come over and light it and then it would be an hour (at most) before we could use the water again. I never went without showering, being able to wash my clothes or have my basic needs met in this house while growing up.
8.[…] We all made our own lunches and organised our own breakfasts. My father would usually help me with my homework and afterwards he would sit down and watch television with us. […]
Ms T also deposes to all of the family members helping with caring for the sheep on the farm, and states that she did cleaning work for the accommodation business for a period of time, as well as working weddings and functions in the farm business along with her brothers, Mr X and Mr U, and the Wife’s daughter, Ms W.[33]
[33] Affidavit of Ms T filed 26 June 2024 [11], [14], [15].
Mr U
Mr U similarly describes the family environment, deposing that:
14.[…] Everyone in the home had jobs to do at home and it was very much a collective contribution even when my siblings and I were young children which kept the household running. As soon as we were old enough, we had a strict list of chores including cutting wood, cooking, mopping, dishes, maintaining the garden and doing our own washing.
Mr U also deposes to himself, his brother and sister, and the Wife’s daughter, Ms W, obtaining their Responsible Service of Alcohol (‘RSA’) qualification to work functions for the family business.[34]
[34] Affidavit of Mr U filed 26 June 2024.
I am satisfied everyone worked well and hard when they could.
Husband seeks some chattels
Until final address the Husband sought to retain a substantial number of items from the FMH, and this was contested by the Wife. In final address the Husband sought a much-reduced number of items from the FMH, occupied by the Wife since 2020. He sought:[35]
MR PUCKEY: … There’s a dining table and chairs, which I’m instructed is so heavy that no one could ever move it. There’s a king bed suite, and then there are two outdoor pieces of furniture. Custom-made outdoor three-seater and an old wooden bench seat that I’m told my client’s sister gave him. He would like those items to stay in the house when the wife vacates, and she can take the rest.
[35] Transcript p 295.
While the Wife did not agree with this much reduced list of chattels to be retained, she did not speak against this reduced list or assert the items no longer existed. I am satisfied that just and equitable orders require those few items from the FMH to be made available to the Husband by them being left in the FMH when the Wife departs.
The Wife’s property case
In Outline of Case filed days before the hearing, the Wife relied on her Amended Response filed 29 January 2024 as to the orders she sought. But a substantial change occurred in the running.
The Wife’s case until Outline of Case
The Wife then sought orders for a sale of two of the three blocks of the Farm[36] and a sale of the land and dwelling of the FMH block, with that sale process to commence in 45 days, and that from the sale proceeds she receive a property settlement, a fixed payment, equal to 50% of the to-be-calculated non-superannuation property pool, less the assets she will keep, at settlement of those sales. The Wife said she should have sole conduct of the sales, and the sale process, by execution of documents relating to water licences, commence three days after the orders and that the Husband have 30 days from the orders to remove what he wants from the farming sheds on the FMH Block and she then be at liberty to sell the remaining contents, if any.
[36] See order 10 sought in the Amended Response filed 29 January 2024 and note the sale sought is of “part” of the Farm and although the land of three titles are pressed to be sold, one block is contained in two titles.
The orders sought appear to contemplate the sale of the FMH Block settling first in time and then at that settlement the following is to occur:
8. At settlement of [the FMH Block] property Sale, the proceeds of sale be applied in the following manner and priority:
(a) First, to pay all costs, commissions and expenses of the sale;
(b) Secondly, to discharge in full any mortgage owing to [the Mortgagee];
(c) Thirdly, to reimburse the Wife any costs of disposal incurred by her […];
(d)Finally, the balance to the Wife, noting that such payment is made by the Husband (as sole beneficiary of the [FMH Fixed Trust]) to the Wife.
The orders sought also contemplate that the Wife’s property settlement will be greater than the net proceeds of sale of the FMH Block.
When both sales pressed, sale of the FMH Block and the sale of two of the three blocks of the larger part of the Farm, have settled, after sales costs and discharge of mortgages, the net proceeds are to be applied as follows:
13. […]
(c)Fourthly, to pay the Wife any such sum that may be required so as to achieve an overall division of the non-superannuation assets (net of tax) 50% to the Wife (and 50% to the Husband) taking into account the terms of these Orders and the value of the asset pool as determined by this Honourable Court, noting that such payment is made by the Husband (as sole unit holder of the [Farm Unit Trust]) to the Wife; and
(d)The balance to the Husband (if any).
The clear inference from the orders she then sought in that Amended Response is that tax due from the sales would be borne by the parties, as would sales expenses and the potential rise or fall of the sales (compared to the agreed property valuations) be shared between, or borne equally, by the parties.
In the event the proceeds of sale of those sales did not provide enough to satisfy the Wife’s 50% of non-superannuation property settlement then the Husband was to make an adjusting payment and, in default of that payment, then the remaining block of the Farm, that for the purpose of these reasons is called the “Improvements Block’, was to be sold with the payment taken from the proceeds with the balance to the Husband.
The Wife’s case in Outline of case
In Outline of Case the Wife continued to rely on the Amended Response with salient parts recited above. But the Outline of Case at page 16 of 17 pressed a significant difference. Now, the Wife pressed for the sale, and I infer on the same terms as her Amended Response, of the whole of the Farm including the Improvements Block and the FMH Block as follows:
Due to the interlocking nature of the real properties, it is commercially unrealistic to treat the real properties separately, final orders ought to include the sale of the totality of the real properties to achieve an equal division.[37]
[37] Wife’s outline of case filed 25 July 2024 p 16.
This change was clarified and justified in final address in the following discussion with counsel for the Wife in regard to default provisions:[38]
[38] Transcript p 226.
DR INGLEBY: We say that there isn’t any evidence, even, of being able to raise a million; he says give me the chance. But there is absolutely no evidence of him being able to raise two million, or two and a half million, or three million. Those figures are just totally fanciful. And we say, that if [Mr Miratos] chooses to put his case this way, to – we would say, stick his head in the sand, then that is at his peril as to realisation costs and the like, because he can’t have it both ways. He can’t say, give me the chance to pay out; but, if I’ve got to sell up, you share in the costs. That’s my submission.
HIS HONOUR: And, including on the default, just say I did go down – because there’s always that issue, even if I did go down Mr Puckey’s case line, and just pick a figure, for six months, rather than 12 … and he doesn’t for whatever reason he doesn’t, or he can’t borrow the money – then a default provision kicks in, and you would say the default provision should then have a fixed sum determined by the pool, rather than the rise and fall of the proceeds of sale, including taking into account capital gains tax.
DR INGLEBY: Correct. In relation to which there is no evidence before the court.
HIS HONOUR: There’s no evidence as to the quantum.
DR INGLEBY: No.
HIS HONOUR: There’s no evidence that there will be none.
DR INGLEBY: And there’s no evidence there will be.
HIS HONOUR: Isn’t there an overwhelming inference that there’s going to be?
DR INGLEBY: .... But [Mr Miratos] has chosen – for example, what he could have said is, “Look, the [business], that’s the core activity. I’m a [farmer]. I’ve always been a [farmer], that is where I’ve made my name. That is my professional love, so to speak. Let me keep the [farm]. Finally, we know there are residential properties on the [Improvements] block, let me keep the [farm]. My second priority is to keep it.” But he hasn’t come to court and said that. He has come to court and said, “I want the court to fashion a settlement that reflects my desire to effectively keep everything, and I’m going to justify that on the basis that the wife doesn’t need more than a mil, because that’s more than she has ever had, and it cost me a fortune to borrow it.”
…
HIS HONOUR: … Mr Puckey says it’s just [and] equitable that this man gets an opportunity to keep all this. You say it’s unrealistic, head in the sand. Their parameters. There’s nothing in the Family Law Act or in the rules or anywhere else, that says following a relationship breakdown, whether it’s five years or 30 or 40 or 10, that the division of the property, or the property alteration or the property settlement, whatever term you want to use, under section 79, it must happen within X months. Now, it’s invariably done, you know, pay X in default of the payment and argue 30 days, 60 days, 90, 120; there’s a sale and so on and the default interest runs from the date the payment was due: easy. But where one party says it’s just and equitable that I get a chance to keep what I’ve been working on since I was 16, you say he has blown it, because he has stuck his head in the sand and hasn’t done enough.
DR INGLEBY: No, I’m not saying that. What I’m saying is that he might have worked on it all. Two things….I’m going to submit… there are two legal principles...Firstly, is the duty to end financial relations in section 81. And secondly, is the need to make sure that your Honour’s decision is based on current valuations. The longer you leave it, the more value the “retainer” gets. That’s the answer to that.
The Wife asserts the Husband has had plenty of time to work out how he would meet the property settlement to the Wife and that section 79(4)(d) has no work to do in this case as the Farm and the Businesses should be regarded as a “hobby” farm, not as the source of the Husband’s income.
The Wife’s case included references to the authorities or precedents set out in Appendix 4.
Her case emphasised the considerable extent of Wife’s involvement in the Businesses and cohabitation from 2002. The Wife’s case emphasised the extent of the Wife’s involvement in the process by which some of the currently held assets were acquired or preserved, including her role in preparing for the litigation and addressing the Supreme Court of Victoria in late 2011.
The “double shift” case
The Wife’s counsel invoked the concept of the Wife working “a double shift” by her role as homemaker and in caring for the Husband’s mother Ms O who lived nearby on the Farm and her role in working in, managing and promoting the Businesses. In addition, the Wife brought in the substantial funds in 2010 of about $400,000 from the sale of the home she owned prior to the relationship.
The “consideration” case
The Wife’s case disputed the characterisation of the Farm and the FMH as coming from the generosity of the Husband’s parents and/or family and hence being regarded as contributions by him in the sense of Gosper& Gosper [1987] FLC 91-818 and Kessey and Kessey (1994) FLC 92-495. In Outline of Case, the Wife asserted:
3.The parties contributed equally during the relationship and in the course of the relationship and marriage they acquired by:
3.1The transfer of the [FMH Block] from [Ms O] and [Mr P] to [H Pty Ltd] ATF The [FMH Fixed Trust] at an estimated value of $350,000 to $380,000 [in] May 2004 (wife's first paragraphs 28 and 29).
3.2 The transfer of unit holdings from [the Farm Unit Trust] being [Ms O] (2/5th interest) and [Mr P] (1/5th interest) to the husband in 2009 and [Ms Q] (1/5th interest) to the husband in 2013 (wife's first affidavit paragraphs 55 to 59 and wife's second affidavit paragraphs 25 to 29 and 38).
3.3 The transfers were for value because:
3.3.1 The transfer of the [FMH Block] was "paid for" by the renovation costs for [Ms O]'s house of $142,144 (when [Ms O] moved from the [FMH Block] into Ms O's house), the financial contribution of weekly payments of $500 per week to [Ms O] (wife' s first affidavit at paragraph 28 and 29) until the time [Ms O] obtained a pension after [Mr P]'s bankruptcy in 2012 (wife's second affidavit at paragraph 36) (approximately 7.5 years, being approximately $195,000).
3.3.2 The transfer of unit holdings were "paid for'' by:
3.3.2.1 The $500,000 borrowed from [Z Bank] by the business to payout [Mr P]'s family law settlement to former wife [Ms BB] in circumstances where the properties would have been sold (wife's first affidavit at paragraphs 55 and 58 and wife's second affidavit at paragraph 28 and 29), to ensure the orchard parcel of land on the [Farm] properties was not sold in the default sale under his family law orders;
3.3.2.2 $680,000 was paid out as a result of [Mr P]'s bankruptcy by the husband as he had guaranteed the liabilities being a total of the following matters (wife's first affidavit at paragraph 59):
3.3.2.3in excess of $500,000 to creditors:
3.3.2.4in excess of $150,000 to accountants, including $92,000 for the settlement payment funded by [Z Bank] secured over the [D Street] property to be repaid in 12 months;
3.2.5.5$30,000 in legal fees, from VCAT proceedings;
The business debt had increased due to [Mr P]'s ’s bankruptcy from $450,000 to $2,000,000 post 2009 (wife first affidavit at paragraph 62).
3.3.2.3Defending the Supreme Court proceedings issued by [Ms Q], following her lodgement of caveats against the titles of the [B Street] properties (wife's first affidavit paragraphs 57 and 58) including approximately $130,000 paid to [AA Law Firm] (wife's second affidavit at paragraph 31) and the non-financial work of the wife once the Husband and his mother were legally unrepresented.
3.3.2.4 The non-financial work of the wife in performance of the obligations to care for [Ms O] under the agreement for her care between the husband, [Mr P] and [Ms O] (wife's first affidavit at paragraph 76, 82 and 88 and wife's second affidavit paragraph 26).
She pointed to the role of the November 2009 ‘Care of Ms O and Mr P’s agreement where Ms O transferred her units (and I infer 2 of 5 units) in the Farm Unit Trust in consideration of $1 and the obligations of her sons to care for her. Then, on her case, she undertook the burden of most of the time, work, care and effort of caring for Ms O.
The Wife says although the funds to pay to Mr P by payment to his former wife and creditors were effectively borrowed, and not by her, the Wife points to the acquired debt being serviced from the Businesses conducted with her substantial effort and “double shift”.
Hence, apart from contributing the funds from the sale of her home in 2010, the Wife’s case asserts that she was effectively a direct and indirect contributor to the acquisition of all but one of the units of the Farm Unit Trust.
The Wife says the Husband has painted himself into a corner as there is little to no evidence that he can raise the substantial funds necessary to pay her and therefore, selling of the Farm and the FMH property is necessary and should be sooner rather than later.
The following exchange occurred during closing submissions of counsel for the Wife:
HIS HONOUR: Do I do anything with the fact that [Ms Miratos] was not ever personally liable for any of the borrowed debt?
DR INGLEBY: Where did the money to pay the interest on the borrowings come from, is my answer and - - -
HIS HONOUR: Yes, from their joint contribution. Their joint - - -
DR INGLEBY: Yes.
HIS HONOUR: Sorry, I shouldn’t say joint. Their different, but considerable contributions over time.
DR INGLEBY: Yes.
I am satisfied that the Wife did not undertake any debt associated with the business, although she was a director and, as far back as 2004, the parties received accounting advice that referred to the benefit of limiting the liability of the Wife in the business structures.[39]
[39] See annexure MSM-10 to the Wife’s trial affidavit.
More than Ms Jabour
In submissions the Wife’s counsel referred me to the case of Jabour& Jabour [2019] FamCAFC 78, and asserted that:
DR INGLEBY: Remembering that the full court said 34 per cent for Ms Jabour was not a proper exercise of discretion. 47. Ms [Miratos] has done far more than [Ms] Jabour. In less years, I agree. Okay, it’s in less years. Ms Jabour was in the – was 30, from memory – late, late 20s.
HIS HONOUR: Ms Jabour had three children.
DR INGLEBY: Yes, and three children. But these two didn’t have children together, in the sense of being the genetic parents of them, but there was the care of children in difficult circumstances. So this idea of 15 per cent on contributions, and bump it up to 5 per cent because of the disparity, is, frankly, insulting. And it’s just nowhere near what is the range in a – either short-long or long-median marriage with this myriad of contributions.
It was clear that the thrust of the Wife’s case was that the quality and intensity of her contribution over many years outweighed the, she says, exaggerated, direct and indirect financial contribution made by the Husband. This position includes:
·the alleged “double shift” indirect financial and non-financial contributions of the Wife of working in various roles in the Businesses; and
·her role as homemaker to the household of herself and the Husband, her daughter and the Husband’s children; and
·the “consideration” point.
The Wife’s criticisms of the Husband
The Wife’s criticisms of the Husband’s case included the following.
The “no serious attempt to fund a settlement to the Wife” criticism
In the Wife’s case outline, the Husband was criticised for an alleged failure to disclose a “serious” attempt to fund a settlement to the Wife.[40]
[40] Wife’s outline of case at [5] of page 14.
During cross-examination, the Husband was asked about his proposal to be granted a period of 12 months to make a settlement payment to the Wife. The questions put to the Husband espoused a criticism of him, that he had not provided any evidence of his ability to fund a settlement payment to the Wife.[41]
[41] Transcript p 59.
DR INGLEBY: See, these proceedings have been on foot for about four years, give or take, haven’t they?
THE HUSBAND: Yes.
DR INGLEBY: Yes. You’ve had plenty of opportunity to have discussions with the bank, haven’t you?
THE HUSBAND: Yes.
DR INGLEBY: Yes. And in fact, you have had many discussions with the bank, haven’t you?
THE HUSBAND: Yes.
DR INGLEBY: But you can’t produce a single document relating to any of those discussions, can you?
THE HUSBAND: The bank wouldn’t give you a document just on a word, it wouldn’t mean anything.
DR INGLEBY: You, for example, haven’t prepared any formal application to the bank, a feasibility proposal, “This is how I can do it.” You haven’t made any formal proposal to the bank for any figure at all, have you?
THE HUSBAND: Like I said, I can’t put money when you don’t know what I’m meant to be paying.
…
DR INGLEBY: You know that it’s going to be between one and three and a half million dollars, don’t you?
THE HUSBAND: Looking on what both sides – yes.
DR INGLEBY: Yes. So, you could have made an application with, for the sake of argument, half million dollar increments. “What about one?” “What about one and a half?” “What about two?” “Two and a half?” “Three?” “Three and a half?” and asked for their response in relation to that range, couldn’t you?
THE HUSBAND: I thought – me talking verbally, I didn’t know I had to produce a piece of paper to say that for the court.
DR INGLEBY: No, no, I’m just – I’m talking about going to the bank? […] You could have asked them, “Will you lend me one?” “Will you lend me one and a half?” “Will you lend me two?” “Two and a half?” “Three?” “Three and a half?” You could have put those as alternatives, couldn’t you?
THE HUSBAND: Yes. Looking at it now, yes I could.
…
DR INGLEBY: [….] I’m putting to you, [Mr Miratos], if you were serious, if you were serious about borrowing an amount of money, you would have had those sorts of discussions with the bank?
THE HUSBAND: I did have discussions with the bank.
DR INGLEBY: But you didn’t have any specific discussions about any specific figures, did you?
THE HUSBAND: Like I said, I had discussions at the lower end with the bank. I never went to the higher end with the bank.
…
The “didn’t seriously consider selling the Orchard Block” criticism
Included in, or ancillary to the “no serious attempt to fund a property settlement” criticism, was a criticism of the Husband, put to him under cross-examination, that he had not seriously considered selling the Orchard Block to fund a settlement, as he had not “properly” informed himself of the water rights attaching to the Orchard Block property, nor made enquiries about selling the property. It was put that the Husband’s suggestion that he could sell the Orchard Block property to fund a settlement to the Wife was not serious given that he mistakenly indicated under cross-examination that the Orchard Block property did not include water rights. Counsel for the Wife put it to the Husband as follows:[42]
[42] Transcript p 66.
DR INGLEBY: Would it be fair to say, [Mr Miratos], that you haven’t looked at this question carefully until it arose in the last 10 to 15 minutes?
THE HUSBAND: I haven’t studied this, no.
DR INGLEBY: No. But this, whether there are water rights or not for Orchard Block, would be an important point for any purchaser, wouldn’t it?
THE HUSBAND: Yes, I’m just confused.
DR INGLEBY: Yes, and I’m suggesting to you that if you were serious about this, “I can sell the Orchard Block” idea, you would have thought about it a bit more carefully in terms of what you were actually selling?
THE HUSBAND: We’re selling 40 acres of land.
DR INGLEBY: With water or without water?
THE HUSBAND: Without water.
DR INGLEBY: Right. But you didn’t know that there was a licence allowing you to use the land – use the water from the [Improvements] Block, did you?
THE HUSBAND: That licence wouldn’t give you the right to use it once the land is sold, because that’s on another property. So, that licence can’t overrule saying you can take water out of someone else’s dam.
…
Further questions were put to the Husband regarding his “seriousness” in suggesting the sale of the Orchard Block in order to fund a settlement:[43]
[43] Transcript p 66.
DR INGLEBY: What inquiries have you made about marketing that particular block?
THE HUSBAND: I’ve talked to a couple of real estate agents.
DR INGLEBY: Name them?
THE HUSBAND: It was [CC Real Estate], but that has now been taken over by [DD Real Estate], I think. He did tell me.
DR INGLEBY: When did you talk to [CC Real Estate]?
THE HUSBAND: Earlier in – what month is it now? Earlier this year, I can’t recall which month.
DR INGLEBY: Yes, and what did [CC Real Estate] say about what you might expect to get for that block?
THE HUSBAND: He said you would need to clear it to be able to sell it. And he didn’t put a price on it because he said, “Once you’ve cleared it”, he will look. But he expected a price over a million, but he didn’t say a price. Because he said at the moment it looks run down, and it’s – not many people would be interested.
…
DR INGLEBY: Did you talk to [CC Real Estate] about water rights?
THE HUSBAND: No.
DR INGLEBY: [CC Real Estate] told you that you needed to basically clean it up?
THE HUSBAND: Correct.
DR INGLEBY: Why haven’t you?
THE HUSBAND: Well, there hasn’t been – I thought we were going to court earlier and then I was waiting for this court to be over so I can clear my mind and then I will pursue everything I can at 100 per cent once I’ve got this court case done. […] There has [been] a lot of stress. So, that’s why once the court case is over, I don’t have to think about this, and then I get on to my normal work.
DR INGLEBY: So, I’m just going to suggest to you, if you were serious about marketing the orchard block, you’ve had four years to clear it, haven’t you?
THE HUSBAND: I don’t know how to answer that.
DR INGLEBY: Well, could you, at any stage in the last four years, have started clearing the orchard block?
THE HUSBAND: I haven’t done anything to the farm because when I started to clear some vines to stop [weeds] I had someone taking a lot of pictures. So, I just haven’t done anything until this case is done, then we start.
DR INGLEBY: Have you spoken to anybody other than [CC Real Estate] about selling the orchard block?
THE HUSBAND: No.
DR INGLEBY: Have you spoken to [CC Real Estate] about selling any of the other blocks or [the FMH]?
THE HUSBAND: No.
DR INGLEBY: Why not?
THE HUSBAND: Because that’s the block I had deemed would go first.
DR INGLEBY: Okay. You deemed that it would go first, and you knew it needed clearing up; correct?
THE HUSBAND: Correct.
DR INGLEBY: But you’ve done nothing to clear it up; correct?
THE HUSBAND: Correct.
The Husband had deposed as follows:[44]
48. I further seek the opportunity over a period of not less than 12 months to make such payment to [Ms Miratos] as is required to settle all financial issues between us in accordance with the terms of the final orders sought my Application. As is plain from [Ms S]’s report, there is significant value in the assets of the [Businesses] but the income from [the Farm] operations over the years has been at such low levels that there been difficulties in obtaining access to borrowings. The problem has not been the question of security but rather the serviceability of those borrowings.
49. In the course of these proceedings, I have had many discussions with the NAB, which has been supportive over many years. In my recent discussions, I have made it known that I will require funds to meet my settlement obligations to [Ms Miratos]. A ‘chicken and egg’ issue has arisen in that NAB is unable to give any advance indication to me as to how much it may be prepared to advance (in addition to the existing secured borrowings and other facilities) and would need a clear indication of the total payment obligation before considering any further application for loan approval.
50. In the event NAB is not in a position to advance sufficient additional funds with which I can fund the proposed payment to [Ms Miratos], I will need to sell some of the land presently held by [J Pty Ltd] and [Post Separation [E] Pty Ltd. The most commercially viable land to sell if required is the parcels upon which the now non-operative orchard is sited. Without removing the trees and returning the orchard site to a more viable and usable ‘parcel’, I will be unlikely to realise the best price for that land as purchasers would be confronted by the expense and difficulty of the orchard removal.
51. In the circumstances, I seek a period of not less than 12 months within which to make any necessary payment to [Ms Miratos] so that I can explore all available options and implement them. In the further circumstances in which [Ms Miratos] and members of her immediate family have lived at the [FMH] property for over 5 years since our separation, I contend that such an order is in all the circumstances fair and reasonable.
[44] Husband’s trial affidavit.
Decisions where the Full Court finds error and re-exercises the discretion or decision are of particular assistance to Judges and practitioners where the facts are similar enough to be roughly and actually comparable. That principal was approved by the Full Court in Wallis & Manning (2017) FLC 93-759.
In Wayne & Wayne [2010] FamCAFC 33 (‘Wayne’), the Full Court dealt with an appeal where the total asset pool was $937,000 (in 2010 dollars), the parties had 4 children aged 18, 16, 10 and 8. Contribution was found to be 48/52 in the Wife’s favour and that was not interfered with on appeal.
In Wayne, in those circumstances, the Learned Trial Judge made a section 75(2) or third step adjustment of 10%. The Full Court found the extent of that adjustment to be an error of law and decided the adjustment should be only 4% in the circumstances. The rationale of that decision can be discerned from the following paragraphs of the appeal decision:
[107]It is also important to recall what was said in Phipson & Phipson [2009] FamCAFC 28 when the Full Court was dealing with another appeal from the trial Judge in the present proceedings:
[39]It is always important to keep in mind that an adjustment of X% for s 75(2) factors leads to a disparity in the value of property received by the parties representing 2 x X%. It is that disparity, measured in “money terms”, that requires consideration in determining whether the result is just and equitable: see Campbell v Kuskey (1998) FLC 92-795 at 84,928.
[108]The 10% adjustment his Honour made on account of s 75(2) factors has led to a disparity in favour of the wife equivalent in value to 20% of the assets. In money terms this represents $187,733 out of a total asset pool of $938,665…
In Lovine & Connor another Full Court approved the observations in Wayne and demonstrated that the percentage, the actual dollar amount of the adjustment and the disparity the adjustment creates should be taken into account when considering a section 75(2) adjustment.
In Wallis & Manning (2017) FLC 93-759 the Full Court, after a discussion of the section 75(2) factors applicable to that case, concluded:
[169]In our view, s 79(4)(e) requires those matters to be taken into account in arriving at orders that are just and equitable as between the parties. In arriving at an appropriate assessment for those factors, a dollar value of it should be uppermost in our minds [79] and, of course, the ultimate disparity in entitlements which it might produce. That dollar value is, in turn, dependent upon the value of the interests in property of the parties.
In Varnham & Moses (2021) FLC 94-007 the Full Court again approved the “real money” approach of Wayne, and of Phipson & Phipson [2009] FamCAFC 28 (cited in Wayne), and of Lovine & Connor.
Taking those authorities into account there can be no doubt that settled law requires, when considering all relevant section 75(2) factors that the “real money” as well as the “percentage” must be considered, as well as the disparity between the parties, that any adjustment creates.
The Wife seeks a that there be no adjustment on account of section 75(2) matters but from the position of an assessment of overall equality of contribution. The Husband seeks that there be a 5% adjustment on account of section 75(2) matters but from the position of an assessment of contribution as being 85/15, in his favour.
Discussion of the factors
The following headings, for convenience, paraphrase clauses of section 75(2), but I take into account the whole of the relevant cause.
Age and state of health
The Wife is 57 years old and says that she has suffered some mental health issues following the passing of her Father in 2023 and the stress regarding this litigation. She suffered what she calls a “breakdown” in 2018 and was diagnosed with anxiety and depression in 2020. She otherwise states she is in good physical health.
The Husband is 61 years old. He submits, and I accept, that he is in good health. The Husband is a farmer and business operator, and I infer that means he is likely to continue working on the Farm, if he is able to retain it, until he is physically unable to, or until he dies.
Income, property, financial resources and capacity for employment
At the end of the second step or contribution analysis, the Wife will have an assessment of her contribution as being 27.5% and about $1,892,000. The Husband will have an assessment of his contribution as being about 72.5% and about $4,988,000. That is a significant disparity of assets as at that stage. That is, the Husband will have almost $3,100,000 more than the Wife. That disparity, in a relationship of the length of this one and with the age and station in life of each of the parties, calls for an adjustment. However, that adjustment should be less than the 5% adjustment asserted by the Husband when he was contending for a contribution assessment of 85/15 in his favour.
Responsibility to support a child
Neither party has the obligation to support children under the age of 18 years.
Commitments of each of the parties to support themselves or a child
Both parties will have commitments of ensuring accommodation for themselves.
Responsibilities of either party to support any other person
Neither party has the responsibility to support any other person apart from themselves.
Pension or benefit
Neither party has an entitlement to any means tested pension or benefit.
Reasonable standard of living
In the circumstances of the Wife’s contribution assessment as being in the order of $1,892,000, and the Husband having a contribution assessment of a little under $5,000,000 of assets, both parties will have a reasonable standard of living in the future.
Would maintenance assist education or training
Neither party seeks maintenance after receipt of property settlements of the orders that will be made.
Effect on creditors
Neither party submitted there would be any effect on creditors of the orders either party seeks.
Effect party contributed to the earning capacity and property of the other
Neither party submitted that this factor was material to this case.
Whether party cohabiting with another person
There is no evidence of either party cohabitating with another person.
Any fact or circumstances required to take into account
In her Outline of Case document, the Wife pressed for a section 75(2) factor adjustment, in the event that the assessment of her contribution was regarded as less than 50%, of whatever was necessary to bring her share of the property pool up to 50%. I do not accept that as an appropriate basis for a section 75(2) factor adjustment, as it appears predicated upon an assumption or entitlement to 50%.
Conclusion as to section 75(2) adjustment
The principal matter pressed when a significant section 75(2) factor adjustment was sought by the Husband was the disparity of assets at the end of the section 79(4) (a),(b) & (c) analysis.
Because of the Wife’s appearance in the witness box, the question arises as to whether there may be some fragility to her mental health. It is not disputed that the Wife suffered what she described as a “breakdown” in 2018 where she took some time away from the Farm. The part of the Wife’s medical records annexed as MSM25 show that at the time after separation and before the Husband was excluded from the FMH, on 11 March 2020, and I infer a time of great stress, the Wife was diagnosed as suffering “anxiety and depression”, was prescribed to continue medication and diagnosed as “needs to have counselling” and referred to a psychologist. However, no other medical evidence was before me and the Wife did not press for any adjustment on account of her health or her mental health.
The substance of the Wife’s case asserts, and I accept, that the Wife is a capable, skilled and hard-working person who can competently turn her hand to a variety of roles and occupations.
In those circumstances I do not regard her as suffering poor mental health such as, without the stress of litigation and or the witness box, would impede her ability to support herself in employment and so I do not make any section 75(2) adjustment on account of poor mental health. However, her presentation in the Witness when combined with her past history of, at times, needing assistance with her mental health lead me to consider that, at times of stress, there is some degree of fragility to her mental health, and I take that into account and place some small weight on that when considering section 75(2)(a).
The Wife is a little younger than the Husband, but he is a farmer and will likely continue to work hard long after the usual retirement age whether profitable or not. Hence nothing turns on that aspect.
After a long relationship where the parties did not have children, but each cared for the children of the other, each of the parties will have themselves to support. Both parties need capital to house themselves.
I am satisfied that the section 75(2) adjustment should take into account the percentage and dollar amount of the adjustment and also the disparity between the parties the percentage and dollar adjustment makes.
A 5% section 75(2) adjustment may have been appropriate if contribution was assessed at 85/15. I am satisfied, taking into account relevant section 75(2) factors, principally the asset disparity after a relationship of this length, that an adjustment of 3% is appropriate. With a net pool of assets of $6,880,550 a 3% adjustment is equivalent to $206,416 and creates a disparity between the parties on account of section 75(2) factors of 6% and $412,833. That adjustment takes 3% from one party and provides that to the other.
After separation, the Wife’s skills and hard work enabled her to earn an income of up to $60,000 (before tax) per annum[73] when she was working and, although not in itself the measure of a section 75(2) adjustment, the disparity is equivalent to about 6 ½ times that gross income and about 6% of the total pool of assets. The end result of the adjustment is that the Wife ends up with assets of about $2,098,568 (rounded).
[73] Transcript p 156.
Calculations
As set out earlier, the Husband has now, or will retain, subject to default provisions, entities and assets, to the value of about $6,572,624 and the Wife has or will retain assets to the value of about $307,925 and the total asset pool, net of debt, is $6,880,550.
The Wife will end up with 30.5% of that pool of $6,880,550. So, 30.5% of $6,880,550 is $2,098,568 and less the Wife’s ‘keep’ of $307,925 to be retained by her, leaves a payment due to her of $1,790,643 (rounded).
Step four: just and equitable and conclusion
Standing back and looking at the overall effect of a division of 30.5/69.5 of the net of debt all assets pool and a property settlement to the Wife of a total of $2,098,568, that includes assets she has received or will retain of $307,925, with a further payment of a total of $1,790,643 (rounded), is just and equitable.
How long to pay?
So, I will order that the Husband should pay to the Wife the further sum of $1,790,643 by way of property settlement. But how long should she have to wait or how long should he have to organise the payment before default provisions with penalty interest kick in?
The Husband’s counsel referred me to the matter of Guthrie & Guthrie (1995) FLC 92-647 where the majority, Kay and Purvis JJ, building on the principals of the Full Court in Lee Steere & Lee Steere (1985) FLC 91-626 observed at 82,554:
The law is not to the effect that whatever order it makes “it should not be made in such a way as will cause a farmer to lose his or her [82555] property'”. In looking overall at the effect of orders that might be made by the Court, it is proper to look at the consequences of those orders, and one such consequence may well be the need to sell a farming property. It may be if this can be avoided that such a course would be preferable, thereby maintaining an income earning asset….
That passage continued:
This approach is not unique to farms but applies to any business venture. However, if an entitlement is found in favour of a wife or a husband, and the only way in which that entitlement can be funded is by the sale of a farming property, then as with any other property, the farm will need to be sold. A farming property is not sacrosanct and is to be considered as is any other asset of parties in the resolution of a financial dispute between husband and wife.
Whatever the time until payment, I am satisfied the Wife should be able to continue to reside in the FMH if she chooses to, as she has since separation and without the Husband since 2020, until the property settlement or payment has been paid, but subject to the obligation to keep the property in good order as she has since separation and subject to the obligation to facilitate any reasonable bank or financier or prospective sale inspection. She occupies, and has occupied since 2020, to the exclusion of the Husband, almost 35% of the net pool of assets (the FMH Block at $2,100,000 and her ‘keep’ at $307,925), that is a larger proportion than she will receive by the orders I will make, that is 30.5%.
Save as to the “diversion of income” criticism, there is some substance to the criticisms of the skilled cross examiner. But this case is marked by an extreme disparity (in percentages and money) between the cases pressed by the parties and pressed while represented by experienced and competent family lawyers. The litigation has been on foot for years, but it was only in early 2024 that the process, that seemed like herding cats not sheep, of arriving at joint instructions to the range of single expert valuers necessary in the case, was achieved.
The parties were engaged in Intervention Order proceedings as well as the process of obtaining final property orders. The interlocutory proceedings were numerous, complex and I infer time consuming. The parties continued to live close by on the farm and I am satisfied that circumstance and the irritation each found in the others conduct of the interlocutory proceedings and the positions the other took as to the proportions of property division and the multitude of criticisms of the conduct of each other and of children in the proceedings must have seemed, and I infer was, overwhelming.
This controversy goes to the issue of how long the Husband should have to make whatever payment is determined as proper by the application the facts to the section 79 process. But while there is some substance in the criticisms there is also substance in the Husband’s plea that he needed to know what he had to fund. The disclosure and single expert choice and instruction matters were such that on one of the occasions when it was necessary to vacate a long listed final hearing before me, I kept the first day of the final hearing listed to these parties, to deal with, what seemed like inevitable, further disputes that would impede trial readiness. From a lay person’s view, the Husband’s, his position in all the circumstances of this case, is not unreasonable and I am not satisfied it is or was unreasonable.
In terms of what the settlement or payment would be and the Husband’s claim of uncertainty about that a number of things must be noted. It must be recalled that as at the filing of Outline of case stage the Wife overestimated the pool of assets by about $803,000 by double counting the value of plant and equipment, trading stock, sheep and a bank account before agreement was reached at the first day of trial. The sensible agreement about disregarding the negative allegations of each was reached at or just before the first day of trial. Until then, I infer, the parties’ children were lined up to be cross-examined. In the Wife’s Outline of Case the later agreed values of land was “subject to cross-examination of expert”.
In all of the circumstances I am not satisfied that the Husband’s conduct and failure to have already worked out how he can or cannot fund the payment that is determined in the bitterly contested proceedings means that section 79(4)(d) and the principle of Guthrie should have little or no weight. Apart from his children, the Farm is the Husband’s life’s work and work of many years, from long before the start of this relationship and for some time after it ended. His life’s work is leveraged from the generosity and work of his parents and mother Ms O in particular. Those circumstances inform my conclusion that the very common order of “60 days” or “90 days” to make the property settlement would not be just and equitable in this case.
Six months to pay before default provisions operate
In all those circumstances I am satisfied the Husband should have six months from the date of these orders and reasons to work out how to fund the payment, not 12 months as he seeks and not two months as the Wife seeks. I take into account the inconvenience to the Wife of being held out of her property settlement for about 4 months longer than she seeks.
The default provisions: change of case
As can be seen from the discussion with the Wife’s counsel recited under the heading ‘The Wife’s case in Outline of Case,’ the Wife’s position in final address as to default provisions was a further significant change in her case. Her Amended Response, as can be seen from the parts recited above, at least arguably, contemplated the burden of selling expenses and taxation due to sale of assets would be borne by both parties. That position survived the change in the Outline of Case days before the trial. The final address position, recited above, recanted that usual or orthodox position of the costs of sale and any taxation being borne by the parties and had only the Husband bear those expenses. Hence on the Wife’s case the need for default provisions did not arise.
The Husband seeks default provisions that merely contemplate the Wife not giving effect to any of the necessary resignations of corporate position and not what will have to be done if he doesn’t or can’t raise the funds necessary for the Wife’s property settlement. The agreed valuation of the farmland covers the three separate titles or blocks of the farm, including the block with improvements on it. The blocks were not separately valued. I discussed with counsel the advantage of the parties experienced and competent lawyers attempting to work out the potential complexities of necessary default provisions when the dimension of the payment had been determined. Counsel agreed or acquiesced in that concept if default provisions were necessary.
One option, sometimes seen in consent orders, is merely liberty to apply in the event of default of payment. Neither party here presses that.
In this case, subject to further persuasion or agreement, I regard the fixing of default provisions as a necessary part of the quelling of the controversy between the parties as to a just and equitable property settlement.
The authorities referred to by senior counsel for the Husband in final address were extracted and provided to the court in exhibit ‘H8’ in submissions received on 1 August 2024. Relevant to the default orders controversy are senior counsel’s reference to Trask & Westlake(2015) FLC 93-662; [2015] FamCAFC 160 (‘Trask & Westlake’) and submissions as follows:
•At [33]-[48] the Full Court explains the appellable error which arises if default sale orders are framed by reference to fixed dollar amouts – the orders will not reflect the judgment.
•At [4.2.2] and [4.2.3] of her report [Ms S] points out the impost of taxation in the event of the sales proposed by the wife (and, in the event of default, by the husband). Consistent with the principles expressed in Rosati and Rosati [1998] FamCA 38, in circumstances where the husband seeks to retain the properties these liabilities aren’t sought to be taken into account, but in the event of a default sale, they must be captured by the framing of the relevant orders to avoid those orders failing to achieve the division of property determined by the court to be just and equitable.
I accept those submissions.
Further, I am satisfied that it is the interests of justice and necessary to ensure only just and equitable orders are made, in this case, that after I have determined the payment, that the parties should then have the opportunity to work out, or make submissions about, the default provisions.
In this case, on the Wife’s 50/50 case, a sale of all or much of the land will be necessary. On the Husband’s 80/20 case some land may not need to be sold at all. My decision is in between those two positions. It is realistic to contemplate that sale of some or all of the Farm and/or the FMH Block will be necessary to accommodate the payment I have determined. Where it is certain or likely that a sale or sales of assets will occur in the ordinary course of business or as a consequence of orders, the cost of sale, the taxes that will arise and the rise or fall of the asset sold compared to the agreed or determined valuation would ordinarily be taken into account rather than left for one party only to bear or have the advantage of. See for example Trask & Westlake.
In this case, if the Husband defaults on making the payment and a sale or sales is necessary, I do not accept that the usual taking account of sale costs, inevitable taxation or the usual rise and/or fall of price actually achieved on sale should be left to one party. Hence, unless agreed to the contrary, I am not satisfied that those matters should not be taken account of on a default sale.
I acknowledge that the Husband, the most likely party to be disadvantaged by such matters being disregarded, has not put forward evidence of likely tax consequence that he likely will seek to take account of in default provisions. He could have. On his case, a sale may not be necessary or happen. On the Wife’s 50/50 case a sale of all or much of the assets was at least likely, if not certain. The Wife, while pressing that case, did not put forward evidence of the likely tax consequences of a sale or sales. She could have.
In those circumstances the obligation to put forward evidence, and if disputed by single expert, of likely tax consequences fell on both parties. Hence in this case the failure to provide evidence of likely tax consequence of a sale is a deficiency of neutral consequence at this stage of consideration of just and equitable orders.
I do not accept the “head in the sand” argument as justifying a departure from the usual course. There are aspects of “head in the sand” that can be attributed to both parties. The Husband’s planning for the inevitable property settlement appears sketchy. The Wife’s case, at first brush a not realistic 50/50 case, was actually a more than 50% to her because she sought 50/50 of the non-superannuation assets only, and she has 1 ½ times the Husband’s superannuation.
Different orders within the parameters of the dispute
I am satisfied that it is just and equitable that the form of the orders be largely, but not entirely, as sought by the Husband. I am satisfied that it is just and equitable in all of the circumstances and within the parameters of the parties’ dispute to make orders that are different to the orders that either party seeks. I am not satisfied that it is just and equitable to order the immediate sale of all or part of the FMH Block and/or the Farm. I am satisfied that it is just and equitable and appropriate that the Wife should, as soon as practical, resign all of the formal positions she holds in the companies. I am satisfied that should be no later than 28 days from this day. That will assist the Husband in a small way attempt to raise finance and plan for the future.
However, I am not satisfied that it is appropriate to order the Wife to remove the caveats she has lodged over the FMH Block and/or the Farm. I am satisfied that until the total payment has been made, in this highly contentious and bitter property proceeding, it is not unreasonable that the Wife maintains those caveats. However, that finding is on the basis that the Wife would cooperate with any necessary withdrawal and re-lodging of caveats as would assist the Husband operate the Farm and organise the total payment. Hence, there should be liberty to apply in regard to any difficulty as to the maintenance of the caveats to give effect to these orders.
Section 114AB
Senior counsel for the Husband raised the provisions of section 114AB of the Act in regard to the circumstance of the ordinary provision of a section 79 order having a property settlement or payment being made contemporaneously with the transfer of an interest in property or the vacating of a property. Section 114AB of the Act provides as follows:
Section 114AB Operation of State and Territory laws
(1)Sections 68B, 68C, 114 and 114AA are not intended to exclude or limit the operation of a prescribed law of a State or Territory that is capable of operating concurrently with those sections.
(2)Where a person has instituted a proceeding or taken any other action under a prescribed law of a State or Territory in respect of a matter in respect of which the person would, but for this subsection, have been entitled to institute a proceeding under section 68B or 114, the person is not entitled to institute a proceeding under section 68B or 114 in respect of that matter, unless:
(a) where the person instituted a proceeding:
(i)the proceeding has lapsed, been discontinued, or been dismissed; or
(ii)the orders (if any) made as a result of the institution of the proceeding have been set aside or are no longer in force; and
(b)where the person took other action--neither that person nor any other person is required, at the time that the person institutes a proceeding under section 68B or 114, to do an act, or to refrain from doing an act.
Although sometimes described as the first in best dressed rule, the legal and practical effect of this provision is that where a proceeding has been instituted in the State Court for a matter that could entitle a person to an injunction under section 68B or section 114, then the section prohibits another application under the Act dealing with that matter. This not infrequently arises where an intervention order for the personal protection of a party or child or property has been made under State legislation and then, in reliance on section 68B or 114 of the Family Law Act, similar relief is sought. Such an application is prohibited by the section. But if the section 68B or 114 injunction or order is made first, a party is not prohibited, at least by legislation, from seeking similar relief by State legislation relating to family violence or intervention orders.
The purpose of these orders requires the Husband to make a payment of $100,000 roughly a month prior to the second payment, to facilitate the Wife being able to organise moving out of the FMH Block. But she is not required to remain there, and she may choose to move out earlier than the date of the final payment. However, the obligation upon the Husband to make the final payment arises contemporaneously with the later of the Wife vacating the FMH Block and/or 17 December 2025.
In this case and the acrimonious proceedings, intervention order applications, and generally troublesome litigation, I am satisfied that the usual commonsense provision of a party sensibly moving out or transferring an interest in a property to obtain the property settlement he or she seeks may not lead to the property settlement payment being organised and paid in trouble-free circumstances and the Wife having vacated the property in trouble-free circumstances. In this case, I am satisfied that there should be a legal obligation on the Wife to vacate the FMH Block on or before 17 December 2025, provided the property settlement payment has been made.
That obligation in these orders arises from sections 79 and 80, including sections 80(1)(i) (impose terms and conditions) and 80(1)(k) (make any other order… necessary to do justice). Hence that obligation does not engage section 114 or section 68B and is not prohibited by section 114AB.
These observations should not be regarded as determining that either the Husband or the Wife will make unnecessary trouble in regard to these orders but rather, reflect the capacity of the parties together, to experience much trouble and strife.
The further interim application of the Wife
The Wife sought interim orders compelling the Husband to ensure the Wife could have a litigation funder immediately pay her lawyers and secure that loan over the farm assets. The Husband opposes that application. The interim application was brought at the last minute while the parties were, or should have been, preparing for trial.
I am not satisfied that I should make those further orders interim sought by the Wife. Although not the test, I do not consider it necessary to do so. I also do not consider it just and equitable in the circumstances to do so. I also take into account the generosity of the Wife’s solicitors to her throughout these proceedings and acknowledge their acting on her behalf and incurring costs which remain unpaid. However, I also acknowledge the relative security of their position, and I am not persuaded to make those orders.
Further, I would not have been able to both determine the further interim application and give reasons before this judgment.
I certify that the preceding two hundred and eighty-eight (288) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 17 June 2025APPENDIX 1
Documents relied upon
The Husband relied upon the following documents:
·Outline of case filed 25 July 2024;
·Amended Initiating application filed 17 January 2024;
·Affidavit of the Husband filed 17 January 2024 (‘the Husband’s trial affidavit’);
·Financial statement filed 17 January 2024;
·Affidavit of the Husband filed 26 June 2024 (‘the Husband’s reply affidavit’);
·Affidavit of Mr U (the Husband’s son) filed 26 June 2024;
·Affidavit of Ms T (the Husband’s daughter) filed 26 June 2024;
·Affidavit of Ms V (the Husband’s first wife) filed 26 June 2024;
·Affidavit of Ms S (business valuer) filed 2 May 2024; and
·Affidavit of Mr K (agricultural land valuer) filed 2 May 2024;
The Wife relied upon the following documents:
·Outline of case filed 25 July 2024;
·Amended Response to initiating application filed 29 January 2024;
·Affidavit of the Wife filed 29 January 2024 (‘the Wife’s trial affidavit’);
·Affidavit of the Wife filed 22 July 2024 (‘the Wife’s reply affidavit’);
·Financial statement filed 22 July 2024;
·Affidavit of Ms W (the Wife’s daughter) filed 19 July 2024;
·Affidavit of Ms EE (the Wife’s sister) filed 19 July 2024;
·Affidavit of Mr FF (a former employee of the Businesses) filed 19 July 2024;
·Affidavit of Ms S (business valuer) filed 2 May 2024; and
·Affidavit of Mr K (agricultural land valuer) filed 2 May 2024.
APPENDIX 2
Exhibits tendered
Exhibits are identified by the witness through whom the exhibit was tendered or, if tendered in submission, by the party tendering the document. All annexures to affidavits relied upon were tendered in evidence and are identified by the annexure description each contains. Other exhibits tendered are listed in the below chart:
Exhibit No: Description: Party 29 July 2024 H1 Husband’s diagram of properties Husband W1 Wife’s maps (3 pages) of properties Wife H2 2 Water licenses #..24 and #...47 30 July 2024 H3 ‘Missing’ annexures of Mr K’s filed affidavit Wife H4 27 March 2024 NAB documents Wife H5 Ms O’s house asserted invoice renovation bundle Wife 31 July 2024 W2 Median house price advertised information Husband W3 Property advertised sales information including map Husband H6 Probate documents re: Mr OO Husband 1 August 2024 H7 Drafted but unexecuted lease document Husband APPENDIX 3[74]
[74] Should not be included in any anonymised version of these reasons.
Table of names applied for the purpose of these reasons and the names of entities
Entities Key Name of entity: Referred to in these reasons as: E Pty Ltd “E Pty Ltd” G Pty Ltd “Post Separation E Pty Ltd” H Pty Ltd “H Pty Ltd” J Pty Ltd “J Pty Ltd” Miratos Family Unit Trust “Farm Unit Trust” Mr Miratos Fixed Property Trust “FMH Fixed Trust” APPENDIX 4
Authorities or precedents relied upon by counsel for the Wife during submissions included the following:
·Figgins & Figgins (2022) FLC 93-122; [2022] FamCA 688, at [205] of Ellis J
·Pittmanv Pittman (2010) FLC 93-430. [2010] FamCAFC 30
·Lee Steere & Le Steere [1985] FamCA 57, (1985) FLC 91-626
·Leeming & Estrada [2023] FedCFamC2F 729 at [234]
·In the Marriage of Bonnici (1991) 15 Fam LR 138
·Calvin & McTier [2017] FamCAFC 125
·Hill & Hill (2005) FLC 93-209; [2005] FamCA 42 at [65]
·Dickons v Dickons [2012] FamCAFC 154 at [21]
·Jabour& Jabour [2019] FamCAFC 78 at [55], [99] & [133], [71],[73], [86]
·Genesalio& Genesalio [2020] FamCAFC 113
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