SKYE and SKYE

[2017] FCWA 134

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: SUPPRESSED

CITATION: SKYE and SKYE [2017] FCWA 134

CORAM: THACKRAY CJ

HEARD: 5 SEPTEMBER 2017

DELIVERED : 13 OCTOBER 2017

FILE NO/S: PTW 4186 of 2002

BETWEEN: MS SKYE

Applicant

AND

MR SKYE
Respondent

Catchwords:

PROPERTY SETTLEMENT - date of separation contested but unnecessary to determine - only one piece of jointly owned property - just and equitable to make an order for adjustment of property interests notwithstanding long delay in bringing proceedings - global assessment of contributions and s 75(2) factors undertaken - the wife to receive significantly larger portion of the net proceeds of sale from jointly owned property as the husband has had the benefit of a large superannuation entitlement - parties to otherwise retain the assets and property currently in their possession.

Legislation:

Family Law Act 1975 (Cth), s 79(1)

Category: Reportable

Representation:

Counsel:

Applicant: Mr Moser

Respondent: Self Represented Litigant

Solicitors:

Applicant: [Law Firm A]

Respondent: Self Represented Litigant

Case(s) referred to in judgment(s):

Keehan & Keehan [2015] FamCAFC 122

Stanford v Stanford (2012) 247 CLR 108

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1I am required to determine a dispute between [Ms Skye] (“the wife”) and [Mr Skye] (“the husband”) concerning the division of their property following the termination of their marriage more than 15 years ago.

Brief background

2The husband and wife are both 62 years of age. The wife has part-time casual employment as a [administrator] and the husband runs a [sporting business] in [Country A].

3The parties commenced cohabitation at the time of their marriage in 1986. There was a dispute about when they “separated”, but it is common ground they ceased sharing a residence in 1997. Their marriage was dissolved in 2002.

4There were two children of the marriage; [Riley], now aged 30 years and [Tony] now aged 28 years. The wife’s son, [Jacob], who lived with the parties for about nine years, is now 38 years of age.

5The parties acquired a small farm at [Town A] in joint names in 1991. The wife was still living on the farm at the time of trial. She has not remarried and has lived alone since Tony’s departure from the property in 2008. Riley left the farm in 2006.

6From 1997, the husband lived at the [campus] at which he worked. In 2004 he took unpaid leave before moving to Country A in 2005, where he has lived ever since. In 2011, he married a woman with whom he runs his business. His second wife has a son aged about 13, who the husband helps support, as no maintenance is received from the father.

7In February 2015, the husband received a superannuation payment related to his employment in Western Australia. The husband had allowed his entitlements to remain in the fund when he moved to Country A. The tax paid on the withdrawal from the fund was significantly less than it would have been had he not waited until age 60 to receive the benefit.

8In March 2016, more than 13 years after the divorce, the wife commenced these proceedings for adjustment of property interests. The application was opposed by the husband and the matter proceeded to trial in [Town B] in September 2017.

The date of separation

9The parties lived apart on two occasions during their marriage. In 1994/95 the wife and children moved to live with the wife’s parents on their farm while the wife’s father was terminally ill. When the wife moved back home after her father’s death, Jacob, then aged about 16, remained living with the wife’s mother.

10In October 1997, the husband was required to move to the campus at which he was employed. The husband now regards that as the date of “separation”, whereas the wife says they mutually agreed[1] she would remain on the farm with the two children. She also says that she thereafter spent occasional nights with the husband at his residence, but he denied this ever occurred.[2] I think it perhaps more likely that the husband and wife did spend occasional nights together at least up until October 1999. In any event, the wife now says she regards the date of separation as being September 2000, when she discovered that the husband was in a relationship with another woman.[3]

[1] It seems the wife was presented with a fait accompli since, elsewhere in her trial affidavit, she said that the husband “told me one day that he had to move to the [campus] and that the children and I were not coming”.

[2] The husband was instructed in strong terms by his employer that he was required to move to live on the campus – see Annexure “A” to the husband's trial affidavit.

[3] When the parties applied jointly for a divorce in July 2002, they both swore to the fact that they had separated on 5 October 1999. The box on the divorce form in which the parties were required to state the separation date was completed in the handwriting of the husband. In her trial affidavit, the wife initially said the separation was in October 1999, but later in the affidavit, said that “on reflection” she considered it occurred in September 2000.

11In my view, it is unnecessary to determine the date on which the parties “separated” since the real issue is what contribution each of them was making to the acquisition, conservation and maintenance of the assets and in providing for the welfare of the family. Such contributions clearly continued after whichever date the parties “separated” and the focus should be on those contributions rather than on a date which, in this case, has legal relevance only in the context of an application for divorce.

Leave to institute proceedings

12The wife was well out of time in seeking a property settlement. When commencing proceedings, she ought to have filed an application seeking only leave to institute proceedings for property settlement. Instead she filed an application in which she sought such relief as an interim order and then went on to seek, in the same document, orders by way of property settlement as a final order.

13For reasons which are not clear, the judicial officers who have dealt with the matter set up the applications for leave and property settlement for trial at the same time. Ordinarily, the application for leave would be dealt with as a separate, preliminary issue, thereby relieving the parties of the expense of pursuing a claim for property settlement if the application for leave to make such a claim was dismissed.

14Up until the trial, the husband opposed the wife being granted leave to institute proceedings out of time. Upon the issue being explored briefly at the start of the trial, the husband announced that he would consent to the wife being given leave to pursue her claim. An order to that effect was then made by consent.

The property settlement orders sought

15When the wife commenced proceedings she sought an order that the husband transfer his interest in the farm to her. By the time of trial, the wife was proposing an order for sale of the farm and for a division of the proceeds that would bring about a division of the entire property of the parties in proportions 60:40 in her favour.

16The husband’s proposal was that the net proceeds of sale of the farm should be distributed equally and that each party should otherwise retain the assets currently owned by them or in their possession.

The assets and liabilities

17The major asset is the farm at Town A, which is the only jointly owned property. There was no proper valuation evidence, but the parties suggest the property might be worth in the region of $595,000 to $650,000.[4] The farm is subject to a mortgage on which the balance outstanding is $100,956.[5] There are also outstanding shire rates of $14,595.

[4] The wife had an appraisal in December 2014 suggesting a sale price between $780,000 and $800,000.

[5] The mortgage originally secured a borrowing of $90,000, but while the parties were together the borrowing was extended to $98,000 to purchase some cattle.

18The husband owns a home in Country A jointly with his wife. It was purchased in 2015 for the equivalent of A$238,000, which is its agreed current value. The husband claims to have only a half interest, which would seem to be legally correct, even though he provided the funds to purchase the home. He also purchased [Company A shares] in 2015 to a value of $25,358, but these were acquired in his wife’s name. They are now worth $28,030.

19The husband owns the sporting business in Country A which, on paper, generates only a very modest profit. The business has two permanent employees. In his financial statement filed in July 2016, the husband asserted that he had a 50 per cent interest in the business and that this was worth $125,000. In March 2017, he filed a statement in which he claimed that he now had an 80 per cent interest in the business, but said this was worth only $48,000. He repeated this assertion in a financial statement handed up at the start of the trial. No explanation was given concerning the change in the ownership of the business, or the significant reduction in its value. Nevertheless the husband’s share of the business has an agreed value of $48,000.

20The husband and his wife purchased a [restaurant] in Country A a few years ago; however, his claim that it has ceased trading, recording a loss of around [Country A] $60,000, was not contradicted. Otherwise, it was difficult to ascertain the full extent of the husband’s assets and liabilities, since I am satisfied that he took a sometimes strategic, and in some instances unsatisfactory, approach to his obligation to provide full and frank disclosure. On his own admission he gifted a very significant amount of money to his wife, a fact which only emerged in cross‑examination.

21The parties each have a vehicle and other minor assets, savings and liabilities as identified in their respective financial statements.[6] I do not consider it necessary to have any regard to these, given their comparatively modest value.

Capital Gains Tax

[6] Details are set out in the document marked “A” tendered by counsel for the wife at trial.

22Although the farm is the permanent residence of the wife, there are Capital Gains Tax (“CGT”) implications associated with the sale of portion of the surrounding land. Counsel for the wife estimated, without objection by the husband, that the tax would be not more than $100,000. Given the low incomes of both parties, it is difficult to see how the tax would be anywhere near as much as $100,000, but I accept that there will be some CGT liability which will need to be accounted for in the orders I make.

Superannuation

23In 2015, the husband received $433,723 from his superannuation built up during his employment in Western Australia prior to moving to Country A. He had earlier, in May 2006, taken his “non-preserved” entitlements of $24,237. He now has no superannuation as I accept his evidence that he has no interest in the [Country A Fund].

24The wife has superannuation entitlements worth $9,327. These would have been greater were it not for the fact that, between 2010 and 2016, she withdrew a little over $18,000, of which about $12,000 came out in 2010. The wife gave evidence that the money was used, in part, in payment of legal fees she incurred in a family dispute about her father’s estate, and part of it went towards the discharge of arrears of rates for the farm.[7]

The inheritances

[7] No details were provided of the breakdown between these two sets of payments. The wife claimed that the balance of the monies withdrawn from her superannuation was used in meeting living expenses and costs associated with Tony attending university.

25The husband received about $60,000 by way of inheritance from his mother’s estate in 2013, long after the parties separated. There was no satisfactory evidence of how this money was disbursed, but there is no doubt the husband has had the sole benefit of it unless some of it was the source of funds used to pay the arrears on the farm. The wife made no contribution to these monies in any event.

26The wife inherited a one third interest in her parents’ farm. Her entitlement arose under the will of her father, but was subject to a life interest in favour of her mother. Upon the death of the wife’s mother in 2007, a dispute arose between the wife and her brothers about the family farm. The wife maintained that her mother wanted to leave the property to Jacob because he had farmed the land and cared for the wife’s mother in her later years. As the wife’s mother had only a life interest, it was not possible for her to give effect to her desire. The wife wished to respect her mother’s wishes and asked her brothers to agree. After a legal dispute, the matter was resolved on the basis that Jacob received the property upon payment to the wife’s brothers of $430,000, being two thirds of the market value. The wife gifted her one third share to Jacob.

27The husband estimated the wife’s parents’ farm was worth around $800,000 and submitted that the value of the wife’s gift was $270,000, which was the figure the wife gave in an email to him in November 2013.[8] I intend to proceed on the basis that the wife voluntarily (albeit for a principled reason) disposed of an asset worth $215,000, which is the amount each of her two brothers received under the settlement.

Attempts to sell the farm

[8] See Annexure "B" to the husband's trial affidavit.

28The parties, but especially the husband, make claims about the other not having been prepared to sell the farm in the latter years of the separation, when a price might have been obtained in excess of what it seems will now be obtained. I do not intend to discuss the details since there was an inadequate evidentiary foundation to sheet home responsibility to either party for the farm not having been sold, nor to quantify the “loss” the husband fears will crystallise when the farm is ultimately sold.[9]

Property settlement approach

[9] As just one example of the evidentiary difficulties, counsel for the wife demonstrated in cross‑examination that the execution of one of the offers by the husband (on a contract for slightly over $1 million) was defective and there would have been no binding contract even if the wife had accepted it.

29The proceedings fall to be determined under the Family Law Act 1975 (Cth) (“the Act”). Subsections 79(1), (2) and (4) of the Act are reproduced below:

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

…

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

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

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

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

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

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

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

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

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

30The wide discretion conferred by s 79(1) must be exercised in accordance with legal principle, and without assuming that the parties’ interests in the assets are or should be different from those determined by common law and equity: Stanford v Stanford (2012) 247 CLR 108 at [40]. In determining what orders will be just and equitable, a court will satisfy the legislative requirements if it deals with each of the following four steps:

•identify and value the assets and liabilities of the parties;

•assess each party’s contributions to the assets, including any assets which have ceased to be owned by the parties;

•assess the factors in s 79(4)(d) to (g), which also pick up the long list of factors in s 75(2) to the extent they are relevant; and

•consider whether the proposed orders are just and equitable.

31It is important to appreciate, however, as Murphy J said in Keehan & Keehan [2015] FamCAFC 122 at [118] (original emphasis):

The court’s power is not confined by any “steps” or “stages”, nor is it exhausted by reason of the consideration of any or all of the so-called “steps” or “stages”. Having without error determined that it is just and equitable to make some orders altering existing interests in property, and having considered the matters required to be considered by reason of s 79(4), the court has a “very wide” discretion to make such orders as are considered appropriate provided that any such order is just and equitable.

32The requirement for the court to be satisfied it is just and equitable to make some order adjusting existing property interests will be readily satisfied in most cases for reasons the High Court mentioned in Stanford at [42]. In the present matter, the husband submits that it would not be just and equitable to interfere with the parties’ existing interests in property, whereas the wife contends to the contrary.

Is it just and equitable to make any order?

33I am satisfied that it is just and equitable to make an order for adjustment of property interests, notwithstanding the long delay in the wife bringing proceedings.

34In arriving at that decision, I have taken into account, in particular, the fact that the husband’s superannuation was a significant entitlement in an otherwise modest asset “pool”, and that the superannuation was received only in 2015. The entitlement was built up during a time when the parties had arranged their affairs on the mutual understanding that it was the husband’s role to earn income (and in the process amass superannuation) while the wife’s role was to care for the children, which allowed her to earn only a modest income, without significant superannuation benefits attached. It would not be just and equitable to deny her any entitlement to share in the benefit of the superannuation in such circumstances.

Contributions

35The wife submits that contributions overall should be assessed as having been equal. The husband, who was self-represented, did not make any submissions as to how contributions should be assessed, but submits he made a greater contribution than the wife, in particular because of the value of the property he brought into the relationship.

Initial contributions

36At the time of the marriage in 1986, the husband owned a home in [City A] which he continued to hold until 1991 when it was transferred, as part payment, to the previous owners of the Town A farm. The farm cost $185,000 and the value at which the husband’s City A property was transferred to the vendors was stated to be $90,000. The husband and wife borrowed $90,000 as a mortgage on the farm to assist in the acquisition. The wife claimed in her affidavit that there was a mortgage on the City A property, but was unable to recall the amount. It was not put to the husband that there was any mortgage of substance on the property. There was no evidence any money was spent on the property prior to it being transferred to the vendors of the farm. On the contrary, although the evidence was unsatisfactory, I infer that rent was received. I therefore intend to proceed on the basis that the property the husband introduced was of equivalent value to nearly one half of the purchase price of the farm.

37At around the commencement of the relationship, the wife had a home in Town B subject to a mortgage of $20,000. The home was sold for $42,000 at around that time. The wife asserts, and the husband did not deny, that he arranged a private sale of the property. The wife was uncertain how the proceeds of over $20,000 were disbursed but she understood they were invested in shares which the husband “organised through a company called [Company M]”. The husband asserted that they used the proceeds, inter alia, to buy a vehicle, a sewing machine and a spinning wheel. The husband denied that any of the proceeds of the wife’s home were used to acquire shares. There was insufficient evidence to allow me to determine precisely how the funds were expended, but I accept that they were spent on what the parties regarded as joint purposes.

38Both parties had a vehicle and other chattels of modest value at the commencement of the relationship. Neither provided any admissible evidence of the value of these and I am not prepared to find that those assets owned by one party were of any greater value than those owned by the other.[10]

[10] The husband’s chattels included a boat, trailer and motor, which were replaced during the marriage. The wife did not deny his claim that these were “privately settled” in 2001 by a payment by the husband to her of $3,000 “to confirm [his] sole ownership”.

39The husband had built up superannuation entitlements prior to the marriage. He joined the state government scheme in 1978, approximately eight years before the marriage. The wife had also been a member of her superannuation scheme before the marriage but there was no evidence of precisely when she joined.

40Counsel for the wife calculated, and the husband accepted, that if the parties “separated” in October 1997 as the husband asserted, 46.55% (or $201,889) of the husband’s total superannuation entitlements were built up during the period of cohabitation. If the “separation” was found to have occurred in October 1999 (as deposed to in the parties’ joint divorce application), the figures were 54.81% (or $237,709). And, if the separation occurred in September 2000, as the wife now suggests, the figures were 58.59% (or $254,127).

Contributions during cohabitation

41The husband worked throughout the relationship on a full-time basis. Initially he was a [middle manager], but was promoted to [executive manager] in the early 1990s, and on occasions occupied relieving executive manager positions. There was no evidence of the extent of the income he earned although a superannuation statement recorded that in 1997 his “average relevant remuneration” was $53,709. From the time they commenced cohabitation until they bought the farm in 1991, the parties occupied “a [department] house” but there was no evidence whether this related to the employment of the husband, or the wife, or both of them, and whether market rent was or was not paid.

42In 1990, the husband received $20,000 from the sale of [items] he had collected while [hunting] recreationally with the wife’s brother. These funds were used to buy Company A shares, which were placed in the wife’s name “for tax minimisation purposes”. There was no evidence of what the wife might have been doing at the time the husband was pursuing this hobby. However, in 2001, at the husband’s request, the wife signed a share transfer form so that he could sell the shares registered in her name. Although the husband told the wife she would receive half the proceeds of sale, she did not receive this money. The husband explained that he asked the wife to transfer the shares because they had been purchased from the proceeds of sale of the items he had gathered. He claimed that the proceeds of sale were used to assist in the purchase of his business in Country A.

43At the time of the marriage, the wife was working as an administrator five mornings a week and was otherwise caring for Jacob and helping her parents on their farm. The wife gave up her permanent position when Riley was born and she became the primary carer of the children. While the two children were young, the wife did some relief [work] while her parents looked after the children. In 1994, the wife began home schooling Riley after he refused to go to school. The wife continued to do occasional relief work during the time she and the husband lived together. In 1996 she started working at [an office] for five days a week and continued with this until the end of 2000, when she commenced caring for her mother. There was no evidence of the extent of the income the wife earned.

44The husband’s employment was very time-consuming and he was often away from the property, sometimes overnight, hence the majority of the care of the children was undertaken by the wife. In the period when the wife was living on her parents’ farm in the mid-1990s, she cared for the children full-time and continued to return to the parties’ farm on weekends in order to do the washing and attend to other household duties.

45The majority of the work done around the farm was undertaken by the husband. The wife was less interested in the farm work than the husband was, but she did attend to some duties while he was away for work. There was no evidence that any work undertaken by either party around the property earned any income or in any way increased the value of the property. The impression I gained was that both parties enjoyed the [lifestyle] and that the husband hoped they might earn some income from the land.

46The husband gave no evidence of assisting in the care of the children or the care of the home. While it was evident he wanted me to find that the wife was a poor housekeeper during the relationship, he failed to lay a strong evidentiary basis for such a finding. I am prepared to accept, however, that housekeeping was far from the wife’s strong point, especially given her concession that her poor health had impinged on her ability to undertake household duties, and her statement that she had done her “best”.

47On the other hand, there was no evidence to establish that the wife did not supervise the children or attend to their educational and other needs.[11] Indeed, in his closing address, while submitting that the wife was a poor housekeeper who had spent little time on the farm, the husband said the wife’s “focus was always on the children and [her] parents”.

Contributions after cohabitation ceased

[11] There was passing reference in the evidence to the youngest child having attended University. He must therefore have done fairly well in his studies for which the wife must take at least some credit since he was only in early primary school when the husband left the property.

48The husband continued to work after he left the farm, initially for the department and then running his own business in Country A (with a period of unpaid leave in between). Apart from child support/maintenance payments (discussed below) the husband paid the shire rates until 2007 and the interest-only mortgage payments until December 2010. In total, the husband paid $93,600 in mortgage payments between 1997 and 2010 and a lump sum of $18,893 in December 2013 in discharge of mortgage arrears.[12] He also paid around $4,000 in 2013/14 in partial discharge of arrears of shire rates and a further $1,630 in mortgage payments in 2014.

[12] This payment prevented a mortgagee sale of the property which was threatened.

49The husband deposed to having paid the outgoings on the farm in order to “enable [the wife] and boys to stay on the farm, which is what [the wife] wanted”. The fact the husband did not take any proceedings to precipitate a sale suggests that this is what he wanted as well, at least until the boys reached their majority. In any event, as a result the husband had to accommodate himself elsewhere, while the wife (and the boys for some years) had the benefit of living on the farm without making any contribution to the mortgage or rates.

50Riley and Toby were 10 and eight years of age at the time the husband moved off the farm. Thereafter the wife was largely responsible for their care and supervision as it seems they visited the husband only on weekends. No complaint was made about the quality of the wife’s post-separation parenting. Just like the husband’s financial contribution, this was a major contribution, given the boys’ ages and the lack of support from the husband.

51The evidence established that in at least 2000 and 2014 (and very probably in the years between), the house was maintained exceptionally poorly; with the wife living in what can only be described as squalid conditions.[13] The home itself also appears to be in poor structural condition, and the wife gave no evidence of having undertaken any maintenance during the long period she has lived there since the husband left. I do not accept, however, that she is solely responsible for the poor structural condition of the residence since I accept her evidence that the property was not in good condition when the husband left.

[13] See the photographs in Exhibits 2 and 3.

52The husband claimed that “… [the wife]’s stewardship [of] the property has resulted in it being severely devalued”. The wife, although embarrassed and apologetic about the squalid condition of the property, attempted to make light of it by saying that it could be easily cleaned up overnight with the help of her friends. While this might be optimistic, the photographs suggest that a concentrated effort by a number of people might provide some semblance of order, cleanliness and hygiene in a fairly short period. What would remain, however, would be a very rundown residence. Although there can be no doubt that the current appearance of the property would be off-putting to many prospective purchasers, there was no expert evidence to indicate that the condition of the house actually diminishes its value. It may be, for example, that the existence of a very old residence[14] on a rural lot in Town A might add no value at all to the land, even if it was in a better state of repair.

[14] Seemingly of weatherboard and asbestos construction, with the original tin roof and a rustic pergola, along with original plumbing, stove and fittings.

53The parties farmed the property in partnership, but in 2001 the husband commenced trading on his own account. The wife deposed to the fact that “the farming assets” were transferred to another property and he also disposed of some [animals]. The wife also gave evidence of various chattels and pieces of equipment that the husband removed after the separation, but her evidence by which she purported to estimate their value was struck out, save for some evidence indicating that the husband received a few thousand dollars from the sale of stock. The wife also deposed to some assets having been retained on the property. The husband claimed that the [animals] were divided equally by number in 2003 with the wife retaining her share on the farm. Ultimately, even if I attempted to make findings about these matters, the findings would lead nowhere, given that I am unable to have regard to all of the clearly inadmissible evidence purporting to place values on the assets taken and retained.

Assessment of contributions

54The assessment of contributions is often a difficult task, more so in an unusual case such as the present, which was complicated by the paucity of evidence on material issues. The overall picture is of a husband being primarily responsible for financial contributions and a wife being primarily responsible for the more significant non-financial contributions. I consider the parties’ contributions while they were living together ought to be assessed as being of equal value. I consider the husband’s contributions at the outset of the marriage should be regarded as being of greater value than those of the wife since, notwithstanding the difficulties in the evidence, I am persuaded that the equity the husband had in his City A property was significantly greater than that which the wife had in her Town B property. I am also satisfied that overall the husband made the greater contribution to the superannuation entitlements given he was a member of the much more valuable fund for eight years before the relationship. I am less inclined to treat his post 1997 contributions to superannuation as being made only by him, given that his ability to continue working was facilitated by the wife having taken on responsibility for looking after the children.

55Although it is customary to record a finding by references to percentages concerning the contributions of the parties, in the unusual circumstances of this case I have determined that the better course is to move on to consider the s 75(2) and other factors and then make a global determination, in the exercise of my wide discretion, of the appropriate outcome.

Section 75(2) factors

56The wife proposes a 10 per cent “adjustment” in her favour on account of s 75(2) factors, while the husband proposes there be no adjustment.

57Apart from her interest in the farm, the wife has no assets or resources of great substance, and now has only a very small superannuation entitlement. She is 62 years of age, and believes she will be able to continue to work casually for the next two to three years, by which time she expects she will be entitled to the aged pension. She asserted, without challenge, that for most of her adult life she has suffered from a number of health issues. She says she is “otherwise in good health for a woman of my age”. The husband appeared to accept that the wife does not enjoy good health, which he surmised might explain her failure to maintain the property.

58The wife has only casual, part-time employment. At the time she swore her trial affidavit in early 2017, she was working 9.5 hours a week as [an administration supervisor] and had some part-time work as a relief administrator. She was also in receipt of [government] benefits which varied depending upon her income. At the time of trial, the wife was still working on a part-time casual basis including some work she had by then obtained at a local [office] half a day a week. The wife estimated that her combined income was about $300 per week and she also received a “widow’s allowance” of about $197 per fortnight. I am persuaded that she is working to the extent of her physical and mental capacity.

59Apart from his interest in the farm, the husband has his interest in his home in Country A which was funded with his money. It should also be noted that he disposed of $200,000 to his wife, a fact which only emerged under cross-examination, he having failed to provide proper disclosure of what he did with the substantial superannuation payment he received.

60The husband, who is 62 years of age, deposed to the fact, which I accept, that he was finding his work as a [sports instructor] “difficult at times especially when it comes to lifting heavy objects and activities which put stress on my joints, particularly my shoulders and knees which are a source of constant pain”. Other than these issues, the husband acknowledged that he was in good health. He continues to operate his sporting business in Country A. Apart from his disclosed income of [Country A] $7,500 per annum,[15] the husband has the benefit of the fact that his wife receives dividends of about $30 per week from the shares in her name purchased with his money. Counsel for the wife also successfully demonstrated, by reference to bank documents, that the husband was deriving more income from the business than he had previously disclosed. This came about by having clients pay funds into the husband’s account in Australia without being disclosed for tax purposes. As a result of the husband’s failure to disclose his income accurately, I consider I can take a robust view and assume he is earning at least $2,000 a month more than he has disclosed (noting the $10,000 increase in his bank account during the five month period about which he was cross-examined).

[15] His wife draws the same wage, equivalent to about A$98 per week.

61The husband is now a citizen of Country A but continues to be an Australian citizen. The husband deposed to the fact that he has “no access to an Australian or [Country A] pension” but conceded that the cost of living in Country A is “significantly less” than in Australia. I consider that if he returned to live here he would potentially be entitled to Social Security benefits. There was no evidence of whether he would have any such entitlement if he remained in Country A. The husband’s present wife holds dual [Country B] and Country A citizenship, but her entitlement to benefits was not explored.

62While the husband is not receiving a large income, he has the benefit of living in a low cost economy, and over recent years has enjoyed a good lifestyle which included not infrequent overseas travel. Now that the husband is not paying the mortgage payments on the farm and has also stopped meeting the rates, the wife is in some financial difficulty. She is trying to pay the mortgage at the rate of $150 a week but has not been able to contribute to the rates.[16]

[16] She said in her oral evidence she hoped to do so by making a payment of $330 when she received that amount of money which was owed to her.

63The children of the marriage are now adults and independent. Neither party has responsibility to support any other person since the husband’s wife is capable of supporting herself and he has no legal obligation to support her child. It should be observed here that the husband also had no obligation to support Jacob, but that he was supported by the joint incomes of the husband and wife during the time they cohabited. The fact that the wife already had a child when she married the husband means that the marriage (and birth of two more children) did not have as significant an impact on her earning capacity as it might otherwise have had, but I accept there was some impact given that the youngest child was 10 years younger than her first child.

64From the time he left the farm in 1997, the husband paid monies to the wife which he characterised as “voluntary payments for child support”. These were in the sum of $300 per fortnight. In January 2001, the husband was assessed to pay child support at the rate of $629 a month, but the husband had already set up a fortnightly payment of $500, which he continued to pay until 2004. In total, the husband paid an estimated amount of $64,800 in child support. The husband ceased to pay child support when he moved to Country A, at which time the boys were aged 16 and 14 years. His attitude at the trial was that it was the wife’s fault for not following the matter up with the child support authorities when he ceased to pay.

65In making the findings set out above, I have dealt with all the s 75(2) factors that appear to be of relevance, save that I also take into account the fact that the wife voluntarily disposed of $215,000 to which she was entitled. The husband made no contribution to that money but had the wife kept it, she would be more comfortably placed than she now will be. Although it was not put to the wife, there was no evidence to suggest that Jacob would not recognise that his mother provided him with a significant benefit which he would hopefully reciprocate in some way in the event his mother was in need.

The just and equitable result

66Having regard to what I consider to be the somewhat greater overall contribution of the husband to both the farm and his superannuation entitlement, realising there is a range of results available, and taking into account the matters under s 75(2) which I have discussed, I consider the wife should receive the first $165,000 from the net proceeds of sale of the farm and the balance of the proceeds should be divided equally. The parties should otherwise keep the assets and property they presently have in their possession.

67Assuming that the farm sold for $600,000, after payment of the mortgage and rates arrears and the estimated $20,000 costs of sale, the husband would receive about $150,000 and the wife about $315,000 from the farm, from which they would each have a CGT liability to pay. The husband would, of course, retain his interest in his home in Country A and his wife (and presumably he) would continue to have the benefit of what remains from the large amount of money gifted by the husband to his wife.

The form of orders

68As the wife is living on the farm, I consider she should continue to attempt to meet the mortgage payments and the rates. If they fall any further into arrears, the additional arrears should be paid from her share of the proceeds of sale.

69It was common ground that the farm should be offered for sale by auction, but that the auction should be delayed for some months until the weather is warmer and in order to give the wife a chance to clean up the property. The husband proposed a reserve price of $590,000 which on the evidence seemed reasonable, but I accept the submission of counsel for the wife that the reserve should be as recommended by the agent. I do not propose to require the husband to fund any improvements to the property but if the parties agree improvement should be made then it would be on the basis that the husband pays for them (as the wife could not afford to do so) and the husband is reimbursed from the proceeds of sale.

70For these reasons I will make the following orders:

1.The husband and wife place the property at [Town A] (“the farm”) on the market for sale by public auction at a reserve price recommended by the agent appointed to conduct the sale, with the auction to be held not earlier than 15 January 2018.

2.The husband and wife shall jointly appoint a real estate agent to conduct the sale and in absence of agreement, within 14 days, the wife cause her solicitor to write to the President of the Real Estate Institute of Western Australia (Inc) requesting the nomination of a real estate agent for the parties and the parties appoint the agent so nominated.

3.Upon the settlement of the sale of the farm, the proceeds be disbursed as follows:

(a)in payment of the costs of sale and settlement of sale;

(b)in adjustment of rates, provided that if the arrears exceed the sum of $14,595 the wife shall pay the excess from her share of the proceeds of sale;

(c)in discharge of the loan currently secured by mortgage on the title to the farm provided that if the arrears exceed the sum of $100,956 the wife shall pay the excess from her share of the proceeds of sale;

(d)in reimbursement to the husband of any funds expended by him on work done to improve the farm as agreed by the parties;

(e)subject to Orders 4 and 5 below, in payment to the wife of $165,000; and

(f).subject to Orders 4 and 5 below, in payment of the remaining proceeds of sale in equal shares to the husband and the wife.

4.Forthwith upon the sale, the husband and wife shall:

(a)engage an accountant and obtain advice for an estimate of any Capital Gains Tax (“CGT”) payable on the disposal of the farm;

(b)establish an interest-bearing account in the name of both the parties requiring both the parties’ signatures to transact on the account; and

(c)on settlement of the sale of the farm, place the estimated amount into the account.

5.The parties do all things as may be necessary to obtain an assessment of the CGT payable on receipt of such an assessment, pay the CGT from the account and disburse any balance in the account to the parties in equal shares.

6.In the event that there is a shortfall between the amount held in the account and the CGT payable, the parties forthwith on receipt of the assessment pay into the account the amount of the shortfall in equal shares.

7.Both parties have liberty to apply in relation to the terms and conditions of sale of the farm and in relation to the distribution of the proceeds of sale.

8.Save as herein provided, the husband and wife shall retain all assets and property in their possession or under their control including their superannuation.

9.In the event either party seeks an order for costs, they shall file and serve submissions (not exceeding five pages) in support of such application within 28 days of the date of this order.

10.In the event either party files and serves submissions in accordance with Order 9, the other party shall file and serve submissions (not exceeding five pages) in response within 28 days of service of the submissions.

11.In the event either party files and serves submissions in accordance with Order 10, the other party shall be at liberty to file and serve submissions (not exceeding five pages) in reply within 28 days of service of the submissions.

12.The application and response be otherwise dismissed.

I certify that the preceding [70] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate
13 October 2017