W and W

FEDERAL MAGISTRATES COURT OF AUSTRALIA

W & W [2001] FMCA fam 108

FAMILY LAW – Property settlement – valuation of property – Section 140 of Evidence Act 1995 – “Briginshaw Test”.

Applicant:

D D W

Respondent:

W DW

File No:

ZH 2179 of 2001

Delivered on:

7 August 2001

Delivered at:

Devonport

Hearing Date:

26 & 27 July 2001

Judgment of:

Roberts FM

REPRESENTATION

Counsel for the Applicant:

Mr. McVeity

Solicitors for the Applicant:

McVeity & Associates

Counsel for the Respondent:

Mr. McGuire

Solicitors for the Respondent:

Warren Graham & Murphy

ORDERS

That the net proceeds of sale of the parties’ property at W Road, F in T comprising $116,787.03 be divided by payments of $66,970.00 to the Wife and the balance to the Husband.
That any interest earned on the said net proceeds of sale be divided equally between the parties.
That the Wife do retain all property in her possession inclusive of a Hyundai motor vehicle as her sole property.
That the Husband do retain all property in his possession inclusive of a Mini Moke, Toyota motor vehicle and Scanoo as his sole property.
That save as to costs the Application filed 10 July 2000 and the Response filed 2 November 2000 be otherwise dismissed and removed from the Active Pending Cases List.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DEVONPORT

ZH2179 of 2001

DDW

Applicant

And

WDW

Respondent

REASONS FOR JUDGMENT

Applications and issues

DDW (“the Wife”) filed an application for a property settlement in the Family Court of Australia on 10 July 2000. She sought the sale of the former matrimonial home at W Road, F in T (“the property”) and a division of the sale proceeds equally between herself and WDW (“the Husband”).
In addition, she sought further payments from the Husband being one half of the net proceeds of the parties’ bulb plant and stocks, and associated plant and equipment formerly used by the parties in connection with a business that had been conducted by them known as DFCB (“the business”) or one half of the value of the stock plant and equipment “appropriated by the Husband following the separation”, whichever is the greater.
In his Response filed 2 November 2000 the Husband sought an order that the net proceeds of the property be divided equally between the parties.
It is agreed that the property has been sold and the net proceeds are being held in a joint bank account on behalf of both parties in the sum of $116,787.03.
At the start of the hearing before me on 27 July 2001, I was informed that the parties had agreed that the division of the parties’ assets should be on a 50/50 basis. Consequently, the issues that I have to decide did not include issues of contribution or issues of the relative needs of the parties.
The parties were able to agree upon the values of some of the assets that were retained by them, or one of them at the date of separation. However, they are not able to agree upon the value of some of the assets and it falls to the Court to determine the nature and value of those assets that cannot be agreed.
The agreed assets (in whole dollars) are as follows:
Proceeds of sale of property.................................... $116,787.00
Wife’s Hyundai Sedan................................................... $5,650.00
Husband’s Mini Moke........................................................ $800.00
Scanoo (retained by Husband)........................................ $500.00
Husband’s credit union account.................................... $4,500.00
Wife’s bank account....................................................... $5,500.00
The assets that could not be agreed were as follows:
a)The remaining daffodil bulb stock from their business which the Wife estimated to be worth $38,000.00 and the Husband claims he sold for $1,000.00.
b)Rare and potted plants taken by the Husband which the Wife estimates were valued at $20,000.00. The Husband puts no value on them because he says they have not been properly watered and some, if not all, are dead.
c)Various chattels, plant and equipment shown in Annexures “A”, “B”, “C” and “E” to the Wife’s affidavit which she says were retained by the Husband and she estimates are worth a total of $22,000.00. She also says that she retained chattels worth $4,000.00. The Husband position is that the chattels have been equally divided.

Background

The Husband was born in 1937 and is 64 years old. The Wife was born in 1932 and is 68 years old.
The parties commenced cohabitation in the early 1960s and were married in March 1970. They separated in April 1999 so their relationship lasted for approximately 35 years. Most of their married life was spent in E G in V.
The Wife had seven children from her previous marriage and the Husband had two children from his previous marriage. They subsequently had two children of their own. None of those children are dependent upon the parties.
The unchallenged evidence of the Husband is:
“By 1990 all children had grown up and were independent of my wife and I. My wife and I decided to move to T and purchase (the property). It was our intention to “semi-retire” in T. I continued to do gardening work in T and our income was supplemented by my Wife’s pension when she turned sixty towards the end of 1992.”
It is common ground that in or about 1993 the parties purchased a stock of approximately 11,000.00 daffodil bulbs. They had decided that they would try their hand at growing and selling bulbs to supplement their income. That stock of bulbs was purchased for $15,000.00. They then registered the name of the business and over a period of years propagated bulbs and perennials. Both were sold to customers and it is clear that the income produced by the business was modest. The total of sales in the 1996/1997 tax year was $3,089.00 and the total expenses were $769.30. As a consequence they would have received a net income between them in that year of $2,319.70.
The total sales in the following year were $3,329.00 and the expenses were $844.00, giving a net income of $2,485.00.
At some point prior to their separation the parties sold 10,000 bulbs to a buyer from Western Australia for $10,000.00. The Wife says that this was in February 1998 before an inventory was taken of the bulb stock by the Husband’s brother. The Husband says that sale was after that inventory was taken.
The parties returned to Gippsland for a holiday in April 1999 and it was during that holiday that the parties separated. Immediately after separation the Wife returned to T for a few days with her daughter. During those few days she took and sold what she considered to be half the parties’ chattels. She then left the property.
Approximately two months later, the Husband returned to T and resided at the property. It is clear that he was hopeful of a reconciliation but that did not occur. He remained at the property for approximately one year. His evidence is that he did not cope well with the separation and suffered serious and severe depression which required him to be hospitalised on two occasions.
In July 1999 the Husband received a letter from the Wife’s then solicitors in Victoria which stated that they were instructed by the Wife that “cars, bank accounts, clothes, goods and chattels, personal possessions and the like have already been equally divided between yourself and (the wife)”. That letter went on to say: “Accordingly, the only asset of the marriage remaining is the matrimonial home ...”
The property has been sold and as mentioned above, the net proceeds of $116,787.03 are being held in a joint bank account on behalf of the parties.

The issues and evidence

The major issues relate to the value of the bulb stock and “rare and potted plants” that the Wife claims the Husband has retained or “appropriated”. In relation to the bulb stock, it seems to me that the parties agree that the only certain way of establishing the actual number of bulbs is to dig them up and physically count them. That was clearly impractical in each year so they had to estimate the number of bulbs in the ground. It was clear from their evidence that, even during the marriage, they could not agree upon a method of estimating the number of bulbs. The Wife’s position now is that the bulbs in the ground at the time of separation would have been worth approximately $38,000.00. She comes to that conclusion by reference to Annexure “E3” to her affidavit, which is the 1998/1999 stock book. She states that at the rear of that stock book is an inventory of the parties’ bulb varieties and their number as taken by the respondent’s brother at the beginning of the 1999 daffodil selling season.
She agrees that 10,000 bulbs were sold for $10,000.00 to a buyer from Western Australia but she says that the sale was before the inventory was prepared by the Husband’s brother.
On the other hand, the Husband’s evidence is that the sale of bulbs to the Western Australia buyer was after the inventory was taken and that “this was probably something like 70% to 80% of our bulb stock at the time”.
The Husband’s evidence is that by late 1999 and early 2000 it became increasingly clear to him that he and his wife were not going to reconcile. He says that he wrote to her on several occasions indicating that if a reconciliation was not possible he would leave the property. He says that she did not respond to any of his correspondence. Towards the end of 1999 he made preparations to leave the home and he advertised the remaining bulbs for sale in the local newspaper. Initially he advertised them for sale at $5,000.00. He says that he had no response to that advertisement and he subsequently advertised them for $3,000.00. When he got no response to that advertisement he made contact with a potential purchaser and offered to sell her most of the remaining bulb stock for $1,000.00. He says that approximately 5,000 bulbs were sold to that purchaser for that sum. He also sold her a ride-on mower, trailer and some perennials and potted plants for a further sum of $3,500.00. His evidence is that with the agreement of his Wife $1,000.00 of that total sum of $4,500.00 was given to his son as a wedding present and he says that the balance of $3,500.00 covered the costs that he incurred in maintaining the property.
It is clear that the Wife’s position is that the Husband has somehow misappropriated a significant number of bulbs and that he is not being honest when he says that he sold the majority of the bulb stock for $1,000.00.
I should point out that I have no expert evidence whatsoever of normal propagation rates in relation to bulbs, so I must rely upon the evidence of the Husband and the Wife that was before me at the hearing. It also seems to me that if I am to accept the position of the Wife I must come to the conclusion that the Husband is being dishonest and he has somehow hidden or misappropriated the parties’ bulb stock. It is clear that in these proceedings I would need to be satisfied of that on the balance of probabilities. However, I consider that to be a serious allegation against the Husband so I must take account of the matters referred to in Section 140 of the Evidence Act 1995. That reads as follows:
140(1) [Balance of probabilities] In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
140(2) [Matters to be taken into account] Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a)   the nature of the cause of action or defence; and
(b)   the nature of the subject-matter of the proceeding; and
(c)   the gravity of the matters alleged.
In referring to “the gravity of the matters alleged”, it is clear from the decision of the Full Court of the Family Court of Australia in Lindsey & Lindsey (1995) FLC 92638, where their Honours indicated that what is commonly referred to as the “Briginshaw Test” was incorporated into that section.
In that case, Briginshaw v. Briginshaw (1938) 60CLR 336, Dixon J (as he then was) said as follows at page 361:
“The truth is, that when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independent of any belief in its reality.”
In this particular case, I was more persuaded by the evidence given by the Husband than the evidence given by the Wife. At times, I found the Wife to be evasive when the answer sought in cross-examination was clearly not in her interests, whereas the Husband was more open in that he gave answers willingly that were clearly not in his interests.
I am not persuaded that the parties had bulb stock to the extent that the Wife claims and I am not persuaded that the Husband has misappropriated any such stock.
However, it is a different question whether it was appropriate or not for the Husband to dispose of almost the entirety of the balance stock for $1,000.00.
In relation to that, I am satisfied that the Husband took an appropriate course of action in writing to the Wife to let her know that he wished to vacate the property. When he received no response he attempted to sell the stock for $5,000.00. He got no response, so he reduced the price to $3,000.00. However, that advertisement was also unsuccessful. I am therefore of the view that the Husband took a reasonable course of action when he disposed of the bulk of the remaining bulb stock for $1,000.00.
It also seems to me that the same sum was given by agreement of the parties as a wedding present. I have therefore not taken it into account in my calculations.
In relation to the “rare and potted plants”, the evidence was that the Husband would use the parent stock of the perennials on the property to propagate potted plants and sell them. This was done by the parties prior to separation and was clearly done by the Husband after separation.
It is quite clear that the parent stock was sold with the property and its value now forms part of the net proceeds of sale.
It is also quite clear that the Husband purchased between 2,000 and 3,000 pots in order to propagate perennial stocks for sale after separation. He put in the work that was required to produce those potted perennials and he sold them at various garden shows. The Wife contributed nothing to that effort and I am of the view that the Husband is entitled to retain the fruits of his labour. I would only be content to award the Wife some compensation if she had been able to prove to me that the parent stock that was sold with the property was somehow diminished. However, no such evidence was put before me although the Wife’s counsel made a valiant effort in his closing address to convince me that such must have necessarily been the case.
In relation to chattels, I have no independent valuation of chattels and I am satisfied that by travelling to T immediately after separation and taking what chattels she required, the Wife has effected a fair division of the chattels. Indeed, she instructed her then solicitors to write to the Husband in those terms in or about July, 1999.
However, it is my clear view that the same does not apply to motor vehicles. It is agreed, that the Wife’s vehicle at the time of separation was worth $5,650.00 and appraisals were produced to me that the Husband’s vehicle was worth $22,500.00 at separation or at or about separation but is now worth approximately $12,000.00. As the Husband has had the vehicle all that time, it seems to me that he has had the “benefit” of that vehicle during the time that it has depreciated from $22,500.00 to $12,000.00.
On the other hand, the Wife retains a vehicle that was worth $5,650.00 at separation but I have no evidence of its current value. It seems to me that she too must have suffered some depreciation in the value of that vehicle.
It is therefore appropriate to take the separation values of both vehicles into account when dividing the assets.
Given that I have concluded that the Husband was entitled to retain the profits from sales of plants (including bulbs) during the period following separation and that I have concluded that the sum of $1,000.00 received for the sale of bulb stock was with agreement a wedding present to a child, I have not included any valuation in my calculations below for bulbs or “rare and potted plants”.
Similarly, because I have concluded that the parties have had chattels divided equitably between them, I have not included any value for chattels in the calculations below either.
Before calculating each party’s entitlement, I should mention the Husband’s evidence that he retained two each of every variety of bulb that the parties had so that each of the parties could have one if they wished to. He says that he has approximately eight hundred bulbs, being two each of approximately four hundred varieties. He says that the Wife can have one of each if she wants them. However, she says that she does not want them and it is clear that she would like some cash compensation. Frankly, I am not prepared to accede to her request. If she does not want the bulbs which are clearly property of the parties, then that is her loss.
In calculating the parties’ entitlements, I have taken the following assets into account (bearing in mind what I have said above):
Proceeds of sale of the property.............................. $116,787.03
Wife’s Hyundai motor vehicle........................................ $5,650.00
Husband’s Mini Moke.................................................... $8,000.00
Husband’s Scanoo............................................................ $500.00
Husband’s credit union account.................................... $4,500.00
Wife’s bank account....................................................... $5,500.00
Husband’s Toyota........................................................ $22,500.00
$156,237.03
Recalling that both parties accept that there should be an equal division of their property (and noting that neither have any financial resources such as superannuation), the Wife should receive property to the value of $78,119.00. However, she has already had her motor vehicle worth $5,650.00 and her bank account containing $5,500.00. Consequently, she should receive a sum of $66,970.00 from the proceeds of sale of the property in order to create an equality. The Husband should retain the balance of the proceeds of sale.
I have no evidence of whether the proceeds of sale are earning interest. If they are, it is clear that the interest should be equally divided.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of Roberts FM

Associate:

Date: 7 August 2001

[2001] FMCAfam 108

8 October 2001