ALAIM & ALAIM
[2017] FamCAFC 170
•23 August 2017
FAMILY COURT OF AUSTRALIA
| ALAIM & ALAIM | [2017] FamCAFC 170 |
| FAMILY LAW – APPEAL – whether the primary judge erred in the structure of the orders ultimately made – whether the primary judge failed to make orders to give effect to findings – whether the primary judge erred in making orders by reference to both fixed sums and percentages – where the final orders did not provide for the discharge or refinance of existing mortgages upon the transfer of property – where such error could be remedied pursuant to the “slip rule” or by consent pursuant to s 79A(1A) – whether the primary judge erred in assessing the husband’s contributions – whether the primary judge erred in assessing the wife’s future needs pursuant to s 75(2) – whether the result was manifestly unjust – where no material error demonstrated. FAMILY LAW – APPLICATION IN AN APPEAL –– leave granted to rely on amended grounds of appeal – application to adduce further evidence dismissed. FAMILY LAW – COSTS – where the appellant is ordered to pay the wife’s costs. | ||
| Family Law Act 1975 (Cth) ss 75(2), 79A | ||
| Allesch v Maunz (2000) 203 CLR 172 In the Marriage of Bennett and Bennett (1991) FLC 92–191; (1990) 14 FamLR 397 In the Marriage of Money and Money (1994) FLC 92–485; (1994) 17 FamLR 814 | ||
| APPELLANT: | Mr Alaim | |
| RESPONDENT: | Ms Alaim |
| FILE NUMBER: | SYC | 3205 | of | 2012 |
| APPEAL NUMBER: | EA | 153 | of | 2014 |
| DATE DELIVERED: | 23 August 2017 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Bryant CJ, Kent and Cronin JJ |
| HEARING DATE: | 17 August 2016 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 24 October 2014 |
| LOWER COURT MNC: | [2014] FCCA 2424 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Maurice |
| SOLICITOR FOR THE APPELLANT: | Gregory Miller, Willis & Bowring |
| COUNSEL FOR THE RESPONDENT: | Mr Gould |
| SOLICITOR FOR THE RESPONDENT: | Anne Day & Associates Lawyers |
Orders Made on 17 August 2016
UPON the appeal coming before the Full Court for hearing with Mr Maurice appearing for the husband and Mr Gould appearing for the wife,
IT IS ORDERED:
Leave is granted to the appellant to rely upon the amended grounds of appeal contained in the summary of argument filed 28 August 2015.
The application in an appeal filed 9 August 2016 be dismissed.
The appeal filed 20 November 2014 be dismissed.
The husband pay the wife’s costs of the appeal to be agreed and, in default of agreement, as assessed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Alaim & Alaim has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 153 of 2014
File Number: SYC 3205 of 2012
| Mr Alaim |
Appellant
And
Ms Alaim
Respondent
REASONS FOR JUDGMENT
Before the Court is an appeal in relation to property settlement orders made by the Federal Circuit Court of Australia on 24 October 2014. Relevantly, the orders provided for Ms Alaim (“the wife” or “the respondent”) to receive 56 per cent of the parties’ net assets including superannuation and for Mr Alaim (“the husband” or “the appellant”) to receive 44 per cent assessed as a fixed sum and as a percentage distribution on the sale of a property in Suburb B, a State of Australia (“the B property” or “B”). The husband now appeals these orders.
Also before the Court is the husband’s unfiled Application in an Appeal seeking leave to rely on amended grounds and to adduce further evidence in relation to property valuations. Filing of the application was rejected by the Registrar for non-compliance with r 22.39 of the Family Law Rules 2004 (Cth) (“Family Law Rules”). Leave to file the Application in an Appeal was granted at the hearing.
At the conclusion of the hearing of the appeal, the Court made orders:
a)granting leave to the appellant to rely upon the amended grounds of appeal contained in the Husband’s Case Summary dated 28 August 2015;
b)dismissing the Application in an Appeal to adduce further evidence;
c)dismissing the appeal; and
d)ordering the husband to pay the wife’s cost of the appeal, to be assessed in default of agreement.
These are our reasons.
Background
The parties began living together in mid-1990 and married in September that year. They have two children, both now adults.
At the time of the primary hearing the parties had been separated for over three years. During their 20 year relationship both had made important contributions to the union.
At the time of cohabitation the husband owned a block of land at Suburb D which was purchased for approximately $122,000 with a mortgage of $70,000. He had undertaken some work towards building a home on the property prior to cohabitation. Work continued after cohabitation and the parties moved into the home in July 1991.
At the time of cohabitation the husband worked as a bricklayer.
In October 2001 the parties sold the D property for $549,000 and purchased a property at Suburb F for $335,000. The proceeds of the D sale were used to purchase the property and no mortgage was required. A balance of $100,000.00 from the sale was deposited into a bank account to be used for living expenses.
While living in Suburb F the husband was injured at work and received Workers’ Compensation for at least a year and a half.
In 2007 the parties returned to City Y and purchased a unit at Suburb B. The purchase was funded by a mortgage over the F property in the sum of $390,000.
In 2009 the parties’ borrowed $100,000 to pay credit card debts. The loan was secured against the F property.
In 2010 the husband established a training and qualifications business, GHM Pty Ltd which has been quite successful.
During the marriage the wife occasionally undertook external employment and was the primary carer for the parties’ two children.
The parties separated in January 2011 when the husband left the B property. Post separation the wife continued to live at the B property until November 2012 when the locks were changed. She now rents a property at City L.
The husband leased a unit at City L.
In February 2013 the husband filed an Initiating Application seeking a property adjustment between the parties. In his affidavit he gave the F property as his residential address.
The final hearing was held on 19 and 20 June 2014. Her Honour, Judge Walker handed down her reasons for decision on the 24 October 2014.
By Notice of Appeal, filed 20 November 2014, the husband appealed against all orders for property settlement made by the primary judge on 24 October 2014.
All orders made on 24 October 2014 were stayed by the primary judge on 5 December 2014 pending determination of the appeal.
The Appeal
The Amended Grounds of Appeal
The amended grounds fall into two main areas.
1)The first complains about the structure of the orders and an asserted failure to give effect to the findings (grounds 1, 1A, 1B, 1C, 3, 4, and 5).
2)The second involves complaints about the exercise of discretion;
· in awarding too much to the wife under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) (grounds 6 and 7); and
· in giving too little to the husband for his contributions pre-cohabitation, during the marriage and post-separation (grounds 8, 9, and 10).
· Grounds 11 and 12 assert a manifestly unjust result arising from the exercise of discretion complained of above.
Ground 2 was abandoned.
In addition the appellant sought leave to adduce further evidence in relation to the value of the two properties, B and F, since the trial.
Grounds 1-5 — Structure of the Orders
Amended appeal grounds 1, 1A, 1B, 1C, 3, 4 and 5 asserted the following:
1. That Her Honour erred in that the orders, or some of them, if implemented, would result in the respondent receiving in excess of the 56% of the net property of the parties.
1A. The trial judge erred by using in her orders a combination fixed sums and percentages to divide the proceeds of sale of real estate so that the overall division of property differed from the overall percentage division intended by her.
1B. The trial judge erred by failing to make orders requiring the parties, upon transfer of [B and F] into their sole names, to refinance the existing encumbrances over the properties so that the transferring party was no longer named as a mortgagor.
1C. That the trial judge erred by failing to make provision in Order 3(c) for the discharge of the loan secured over the [B] property.
…
3. That Her Honour erred in paragraph 153 by miscalculating that the effect of the proposed division therein would result in a division of assets of the parties as to 56% to the respondent and 44 % to the husband when it would not.
4.That Her Honour erred in Order 3(c) by miscalculating that the effect of Her orders would result in a division of assets of the parties as to 56 % to the respondent and 44% to the husband when it would not.
5. That Her Honour erred in Order 3(c) by miscalculating the effect of Her orders which would result in the wife being entitled to an amount in excess of the entire net proceeds of the [B] property based on its agreed value.
Grounds 1 and 3 are a manifestation of the other grounds.
We intend to deal first with grounds 1B and 1C and 4 and 5. In order to understand these grounds it is necessary to consider their effect.
Orders of 24 October 2014
The orders made by the primary judge on 24 October 2014 are as follows:
(1)Provided that within a period of two calendar months from the date of these orders, the wife is able to obtain the finance she would require to take responsibility for the liability to which the property situated at and known as [1/23-45 M Road, Suburb B], in the State of [a State of Australia (“the B property”)], is subject, the following is to occur:
(a)The Applicant wife is to provide written confirmation to the Respondent husband that she is able to take responsibility for the liability secured by the [B] property, no later than two calendar months from the date of these orders;
(b)Within twenty one days of such written advice from the Applicant wife, the Respondent husband is to do all such acts and things necessary and sign all documents necessary to transfer his right, title and interest in the [B] property to the Applicant wife;
(c)Simultaneously with the transfer of the [B] property provided for in Order 1(b) above, the husband is to pay the wife the sum of $47,740.36; and
(d)Simultaneously with the transfer provided in Order 1(b) above and the payment provided for in Order 1(c) above, the wife is to do all such acts and things necessary and sign all documents necessary to transfer her right, title and interest in the property situated at and known as [67 Z Drive, Suburb F (“the [F] property”)] in the State of [a State of Australia] to the husband.
(2)Should the wife not provide written advice to the husband within the timeframe required by Order 1 (a), the following is to occur:
(a)Within two calendar months of the expiry of the time provided for in Order 1, the husband is to pay the wife the sum of $369,492.36; and
(b)Simultaneously with the payment provided for in Order 2(a) the wife is to do all such acts and things necessary and sign all documents necessary to transfer to the husband the whole of her right, title and interest in the [F] property.
(3)In the event the husband is unable to comply with Order 2(a) in the timeframe specified in such order the following is to occur:
(a)Within a further fourteen days the husband is to list the [B] property for sale by either private treaty or auction and appoint an agent for such sale;
(b)For the purpose of such sale the husband is to cooperate in every way with the agent appointed for the sale including:
(i)Making the key available to the agent;
(ii)Allowing inspection of the [B] property at all reasonable times requested by the agent;
(iii)Doing nothing to hinder or prevent a sale of the property being effected; and
(iv)Signing all documents required by the agent in relation to the listing for sale of the [B] property,
(c)On settlement of the sale of the [B] property, the proceeds of sale are to be paid in the following manner and priority:
(i)All costs and expenses of sale including legal costs and disbursements, agents commission and auction expenses if incurred;
(ii)The amounts required to pay all municipal and water rates outstanding with respect to the property;
(iii)Payment to the wife of 56% of the balance of the proceeds of sale;
(iv)Payment to wife of $189,311.24; and
(v)Payment of the remainder of the balance to the husband; and,
(d)Simultaneously with the settlement of the sale of the [B] property, the wife is to do all such acts and things necessary and sign all documents necessary to transfer her right, title and interest in the [F] property to the husband.
(4)In respect of all other property of each of the parties, including personal possessions, chattels, accounts in financial institutions, superannuation interest and/or financial resources not specifically referred to herein, each party is declared to be the sole and beneficial owner, to the exclusion of the other.
(5)
(a)The party who retains ownership of the [B] property and the [F] property pursuant to these orders shall indemnify and keep indemnified the other party in respect to any liability relating to such property;
(b)The husband is to indemnify and keep indemnified the wife in respect of any liabilities in the name of [GHM Pty Ltd], and in the name of any other company or business in which he has a controlling interest; and,
(c)Each of the parties is to indemnify the other in respect of any other liabilities held in the name of that party.
(6)In the event that either party refuses or neglects within a reasonable time of a request to do so, to execute any deed, document or instrument necessary to give effect to these orders, then pursuant to s106A, a Registrar or Deputy Registrar of the Federal Circuit Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to such deeds, documents and instruments.
The primary judge found the net assets of the parties to have a value of $603,306 (at [64]). There was no challenge to that finding at the date of trial. Indeed, there could not be as the parties had agreed upon values. The structure of the orders involved two properties at Suburb F and Suburb B both of which were encumbered by mortgages. When her Honour came to assess contributions and factors arising under s 75(2) she determined that the contributions factors favoured the husband (55 per cent / 45 per cent).[1] She found that the s 75(2) factors favoured the wife and made an adjustment of 11 per cent.[2] She thus determined that the net assets of the parties should be apportioned as to 56 per cent to the wife and 44 per cent to the husband. This she found equated to $337,851.36 to the wife and $265,454.64 to the husband.[3]
[1] [2014] FCCA 2424, Reasons for Judgment, 24 October 2014, [105].
[2] Ibid [138].
[3] Ibid [141].
The primary judge then noted that by his application the husband sought to keep both properties and pay the wife a sum of money. The wife however, proposed that the B property be transferred to her and that she transfer her interest in the F property to the husband and he pay her an adjusting sum.
The primary judge determined that each party should, if possible retain a property[4] and proposed that the B property be transferred to the wife and the husband retain the F property. At [144] and [145] the primary judge set out in tabular form the effect this would have for both parties. Of particular relevance to the appeal is the fact that in setting out the assets that each would retain, the mortgage on each property was included as a liability. The net effect of this arrangement, the primary judge postulated at [145], was that the husband would have to pay the wife the sum of $47,740.36.
[4] Ibid [143].
Her Honour then went on to consider whether it was likely the wife could finance the B mortgage[5] and noted “given the level of her credit card debt, this may well not be possible for her, although it would be reasonable to at least give her a short period of time to see what she can achieve”.
[5] Ibid [146].
At [147] her Honour proposed that if the wife was “… not…able to raise these funds in a period of two calendar months, the husband should be given an opportunity to retain both the [F] property and the [B] property. To do this he would need to pay the wife the sum of $369,492.36”.
The primary judge acceded to counsel’s request that the husband be given two calendar months to ascertain whether he could buy out the wife in the event the wife was not able to raise the funds to retain the B property.
Her Honour then went on to consider the position in the event the husband was not able raise the required sum and that the B property would then need to be sold.[6] At [150]–[152] her Honour explained:
150. Should the [B] property be sold, its sale proceeds would be uncertain. To determine how the proceeds should be distributed the court will first consider the division of assets excluding the [B] property.
151. Total net assets excluding the [B] property are $281,554.00. The wife’s fifty six percent would be $157,670.24 and the husband’s forty four percent would be $123,883.76.
152. To receive this share, the wife would need to receive a further $189,311.24 from the husband and would also need to receive fifty six percent of the net assets of sale.
(emphasis added)
[6] Ibid [149].
Her Honour then set out the effects of this without including the B property and again, relevantly in our view, included the effect of the F mortgage.
At [154] her Honour then said “[t]o these totals would be added fifty six percent of the net proceeds of sale for the wife and forty four percent for the husband” (emphasis added).
At [155] her Honour then considered the justice and equity of this arrangement saying:
Should the [B] property be sold, the husband of course would retain the [F] property. The wife would receive assets which would facilitate her purchase of her own accommodation. The court regards this as an appropriate and fair result in the matter …
Grounds 1B and 1C complain that Orders 1 and 2 of the Orders[7] did not specifically require the parties, upon transfer of B and F into their sole names, to refinance the existing encumbrances so that the transferring party was no longer named as a mortgagor, and in relation to Order 3(c) did not make provision for discharge of the loan secured over the B property.
[7] 24 October 2014.
In response to these grounds the respondent asserted that they were representative of a “possible technical error in the orders set out … that makes no difference to the outcome of the property division in accordance with the Court’s intent”.[8] The respondent noted, correctly, that the primary judge could have specifically included in the orders a stated discharge of the mortgage in relation to B but that it would be “obvious that any ordered sale of real property encumbered by a mortgage would require the discharge of that mortgage”.[9] They further argued, that the balance of the proceeds of sale as stated at Order 3(c)(iii) clearly reflected the payment of all encumbrances charged to the property including any debt such as a mortgage.
[8] Summary of Argument, Filed on behalf of the Respondent Wife, 28 October 2015, paragraph 15.
[9] Ibid [16].
We agree, and so much is clear from the passages that we have referred to from the Reasons for Judgment and specifically in the tables which showed the liabilities pursuant to the mortgages. In addition, in relation to the F property, as the Full Court pointed out in the course of the argument, a transfer of the wife’s interest of the F property would of necessity have required release from the mortgage and a fresh mortgage to be obtained. The respondent’s counsel argued, in our view correctly, that the mortgage in relation to each property was taken into account by the judge and no material error resulted from a failure to mention the mortgages specifically in the orders.
Counsel for the respondent also submitted that if the Full Court found this to be a mistake it was a mistake that could have been resolved by way of an application under the “slip rule” and had this consent been sought it would have been given. See Vance & Vance (2011) FLC 93–461 which considered the application of r 17.02 of the Family Law Rules and where Boland J, sitting on an appeal from the Federal Circuit Court, at 85,532 identified two essential criteria where the slip rule might be invoked;
·where there is a clerical mistake, and
·where there is an accidental slip or accidental omission.
In Gilles & Irby (2016) FLC 93-687 the Full Court at 81,006 said:
… While the wide powers given to this appellate Court in, relevantly, s 94(2) are ordinarily exercisable when “the order that is the subject of the appeal is the result of some legal, factual or discretionary error”, we incline to the view that the power to “make such decree or decision as, in the opinion of the court, ought to have made in the first instance” carries with it an implied power to correct accidental slips or omissions in the order appealed which are necessary so as to permit the appellate Court to exercise the jurisdiction and powers conferred expressly upon it.
In our view it is clear from the Reasons for Judgment that her Honour intended in relation to the sale of the B property, if that occurred, that the mortgage would be discharged and the net proceeds distributed in accordance with the orders.
In relation to the F property it was equally clear that the husband would be responsible for that liability and implicitly the wife should be released from any liability that she had. Similarly if the wife retained the B property she would look to refinance the mortgage.
As a result of discussion between the bench and counsel for the appellant, having regard to the respondent’s concession that any doubt about the effectiveness of the order in so far as the mortgages were concerned could be cured by agreement, the parties agreed to resolve this issue by consent.
Given the Court’s ultimate decision to dismiss the appeal the parties agreed that they would vary the existing orders pursuant to s 79A of the Act in order to provide for the refinancing of any mortgage of B if the wife was to retain it, or discharge of any mortgage if it was to be sold. Similarly the husband was required to refinance any mortgage secured on the F property so the wife was no longer named as a borrower.
The other matter which was the subject of the consent orders under s 79A of the Act was to make it clear that in Order 3(c) if there was any deficit between the amount the wife was to receive and the amount to be paid to the wife, it was to be paid out of the sale of the B property and thereafter paid to the husband.
Consent orders — pursuant to s 79A
In the interests of expediency and to spare additional effort and cost to the parties by submitting the application to vary the orders to the Federal Circuit Court, it was agreed that upon an oral application being made, a judge of the Full Court would have jurisdiction to make consent orders after the appeal if sitting as a first-instance judge. Accordingly, following the dismissal of the appeal, the parties sought and the Chief Justice, sitting as a single judge of the Family Court of Australia, made orders by consent as follows:
(1)The orders of the Federal Circuit Court of Australia made on 24 October 2014 be varied pursuant to s 79A of the Family Law Act 1975 (Cth) as follows:
(a) Add 1(e) in the following terms:
(i)Simultaneously with the transfers in Orders 1(b) and 1(d) the wife will refinance any mortgage secured over the [B] property so the husband is no longer named as a borrower.
(b) Add in 2(c) in the following terms:
(i)Simultaneously with the payment provided for in Order 2(a), the husband is to refinance any mortgage secured over the [F] property so the wife is no longer named as a borrower.
(c) Add 3(c)(iiA) in the following terms:
(i)The amount required to discharge the mortgage encumbering the [B] property.
(d) Amend 3(c)(v) to read:
(i)Any deficit between $369,492.36 and the amount paid to the wife pursuant to Order 3(c)(i) to (iv) be paid by the husband to the wife within sixty (60) days of the settlement of the sale of the [B] property and thereafter the balance paid to the husband.
(e) Add 3(e) in the following terms:
(i)Simultaneously with the sale of the [B] property the husband is to refinance any mortgage secured on the property so the wife is no longer named as a borrower.
(f) Add 7 in the following terms:
(i)Order 1 of the said orders take effect from today.
(g) Add 8 in the following terms:
(i)Each party do all acts and things and sign all documents necessary to fully implement these orders.
Given the agreement between the parties the matters raised in grounds 1, 1B, 1C and 3, 4 and 5 we need say no more about these grounds. To the extent that the orders were unclear, the variation under s 79A of the Act now clarifies them.
The final ground relating to the structure of the orders was that in appeal ground 1A asserting that the judge erred by using a combination of fixed sums and percentages to divide the proceeds of sale of real estate so that the overall division of property differed from the overall percentage division intended by her.
On a consideration of the orders by her Honour it is difficult to see how this could be legitimately agitated as an error. It is clear from the paragraphs that we have set out that her Honour dealt with the property which was to be retained, or likely to be retained, and provided a percentage distribution. There was no dispute as to the requirement of the husband to pay to the wife $189,311.24 for property which did not include B. In so far as the orders provided for a sale of the B property they provided for a distribution of the net proceeds of sale in the same amounts. It transpired, however, that this argument was dependent upon the success of the husband’s application to adduce further evidence.
Application to adduce further evidence
Before turning to the other grounds of appeal, it is convenient then that we deal with the application to adduce further evidence which we also dismissed.
The basis for the admission of the evidence, as submitted by counsel for the husband, found expression in his complaint about the structure of the orders. He sought to adduce evidence that the value of the B and F properties had changed since the orders were made. In particular, he sought to assert that the value of both properties had increased but the value of the B property, which was to be sold or acquired by the wife, had increased more than the F property. As the Court pointed out, in the event that the Court found merit in the appeal and intended to re-exercise the discretion of the original judge, the evidence would be admissible (Allesch v Maunz (2000) 203 CLR 172). However, it was submitted by the appellant that the evidence should be admitted to establish error on the part of the primary judge.
The logic of this is not apparent. There will inevitably be changes in values with the effluxion of time. At trial the parties obtained valuations and reached agreement as to the value of both properties. They conducted proceedings on the basis of the existing assets valued at the date of trial and the primary judge accepted the values based on the uncontested position of the parties. Further, any delay in the finality of the matrimonial property dispute was brought about by the appeal instituted by the husband which he did not seek to have expedited.
If the B property was to be sold, the flaw in this argument becomes even more apparent. The percentages which the primary judge had provided for in the orders would accommodate any changes in value. Indeed, the whole purpose of the flexibility of making orders in terms of percentages and fixed sums was to ensure that if there was a sale, justice and equity would be done. Any changes to property values that occurred post the Orders could not demonstrate error by the primary judge.
The requirements for the admission of fresh evidence are well known and set out by the High Court in CDJ v VAJ (1998) 197 CLR 172. In that case, both parties conducted proceedings on the basis of the existing assets valued at the date of the trial and reached agreement about those values. As the majority (McHugh, Gummow and Callinan JJ) said at 201:
One consideration in construing s 93A(2) [of the Act] is its remedial nature. Its principal purpose is to give to the Full Court a discretionary power to admit further evidence where that evidence, if accepted, would demonstrate the order under appeal is erroneous. The power exists to facilitate the avoidance of errors which cannot be otherwise remedied by the application of the conventional appellate procedures. A further, but in practice subsidiary, purpose is to give the Full Court a discretion to admit further evidence to buttress the findings already made.
At 202 the Court said:
… In contrast, the Full Court of the Family Court must decide the rights of the parties upon the facts and in accordance with the law as it exists at the time of hearing the appeal ... Nevertheless, it is highly unlikely that Parliament in conferring jurisdiction on the Full Court to hear appeals intended that s 93A(2) should be construed in a way that would have the practical effect of obliterating the distinction between original and appellate jurisdiction. Nor can the availability of further evidence relevant to the issues in the appeal be treated as equivalent to a ground of appeal, proof of which prima facie entitles the appellant to a new trial. The power to admit the further evidence exists to serve the demands of justice. Ordinarily, where it is alleged that the admission of new evidence requires a new trial, justice will not be served unless the Full Court is satisfied that the further evidence would have produced a different result if it had been available at the trial. Without that condition being satisfied, it could seldom, if ever, be in the interests of justice to deprive the respondent of the benefit of the orders made by the trial judge and put that person to the expense, inconvenience and worry of a new trial.
(footnotes and citations omitted)
As the High Court also pointed out at 201, the discretion reposed in the Full Court is not unfettered. Citing the Full Court in In the Marriage of Abdo and Abdo (1989) FLC S92–013 (“Abdo”) at 77,322 – 23; (1988) 12 FamLR 861 which said that the Full Court’s discretion to receive further evidence “must be exercised judicially for the purpose of avoiding injustice”. In particular that, “… [t]he nature of the particular proceedings in the Family Court is also likely to influence the Court’s discretion to receive further evidence” and “[e]ach case must necessarily depend upon its own special circumstances”.
The Full Court in Abdo was also dealing with an application to adduce further evidence as to changes in the value of real estate since the trial. Relevantly, the Full Court said at 77,323:
The present case is not concerned with evidence of matters which occurred before the trial or before the making of an interlocutory order, but with matters which have occurred since the hearing. The order, like most orders under sec. 79, was based upon the value of the property of the parties as at the time of the hearing. The adjustment of proprietary interests of the parties was made on the basis of the property values at that time. No prediction was made as to the future values, except that the Judge understood that they were likely to rise. There was no area of uncertainty in which the trial Judge’s prediction operated … It cannot be said that any premise on which the decision was based has been falsified or that there was any other demand of justice requiring that this decision should be reconsidered because property prices had increased.
None of the requirements of fresh evidence as set out in CDJ v VAJ are met and the evidence sought to be adduced, if accepted, does not demonstrate that the order under appeal is erroneous. Accordingly we dismissed the appellant’s application to adduce further evidence.
Given the rejection of the husband’s application to adduce further evidence, ground 1A cannot be sustained.
Exercise of discretion
Grounds 6 and 7 — Awarding too much under s 75(2)
Grounds 6 and 7 asserted:
6. That Her Honour erred in the exercise of Her discretion by making an 11% adjustment favour of the respondent under sec. 75(2) which adjustment was excessive.
7. That Her Honour erred in that she failed to give adequate reasons for making an 11% adjustment in favour of the respondent under sec. 75(2) in particular by not referring to her finding in paragraph 92 of the judgment.
As to the reference to [92] we are not able to discern the argument which was not the subject of written submissions and nothing further in oral submissions was said about it.
As to the asserted error, given it was a discretionary determination, the appellant is met with the usual difficulty in overturning a discretionary judgment. As Gibbs CJ observed in Mallett v Mallet (1984) 156 CLR 605 at 614:
The meaning of the statement which is found in the authorities that an appellate court may interfere with an exercise of discretion when it reaches the clear conclusion that no weight, or no sufficient weight, has been given to relevant considerations was explained by Latham CJ in Lovell v Lovell [(1950) 81 CLR 513, at p 519], as follows:
“If completely irrelevant considerations have been taken into account and they have really affected the decision the case is clear, and the order, though made in the exercise of a discretion, should be set aside. Similarly, if relevant considerations are plainly ignored the same result follows. But when the appellate tribunal is considering questions of weight it should not regard itself as being in the same position as the learned trial judge. In the absence of exclusion of relevant considerations or the admission of irrelevant considerations an appellate tribunal should not set aside an order made in the exercise of a judicial discretion ... unless the failure to give adequate weight to relevant considerations really amounts to a failure to exercise the discretion actually entrusted to the court.”
See also Gronow v Gronow (1979) 144 CLR 513 where the principle was similarly expressed by Stephen J, at 519–20, and Aickin J, at 534, 537–8; and also per Mason and Wilson JJ, at 526.
Weight must obviously be given by an appellate court to the discretion of the primary judge and it is “only where the decision exceeds the generous ambit within which reasonable disagreement is possible, and is, in fact, plainly wrong that an appellate body is entitled to interfere” (Norbis v Norbis (1986) 161 CLR 513 per Brennan J at 539 – 540 citing Asquith LJ in Bellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343, at 345).
The appellant complained that there were two reasons for the 11 per cent adjustment:[10]
· An adjustment under s 75(2)(o) for what was described as a premature distribution of assets; and
· The greater income earning capacity of the husband.
[10] Case Summary, Filed for the Appellant Husband, 28 August 2015, [36].
It was contended in broad terms that an adjustment of 11 per cent in a net pool of only $603,000 provided the wife with almost an extra $133,000 and in a relatively modest pool this was “a very significant adjustment as between the parties”,[11] the inference being that it demonstrated error, presumably on the basis it was “manifestly unjust”. In other words it lay outside the parameters of the “generous ambit within which reasonable disagreement is possible”.
[11] Ibid [35].
The primary judge dealt with expenditure by the husband which was the subject of an argument about whether the funds paid to members of his family post-separation should be added back as a premature distribution of assets. Her Honour dealt with this at [113] – [136] inclusive. The primary judge rejected the wife’s assertion the husband’s spending should be characterised as a premature distribution of assets saying at [136]:
Both parties in this matter have provided financial assistance to their children. It is difficult to see how the husband’s actions in providing the financial support he has to the adult children in the context of this matter, can be seen as a premature distribution of assets.
The primary judge however, went on at [137] to say:
However, what these various expenditures by the husband certainly indicate, is that he has had the funds available to him to provide very generous assistance to family members, particularly his daughter, and to be unconcerned about the potential income which could be received from renting the [F] premises or the [B] premises. This contrasts very much with the financial position of the wife. It emphasises the husband’s much greater financial resources compared to the wife and his financial superiority compared to her. This in itself is a significant consideration to be taken into account in an assessment of s.75(2) factors in circumstances of a long marriage where the wife was out of the workforce for many years when she was the primary carer of the parties’ children.
The primary judge then at [138] went on to propose an 11 per cent adjustment in favour of the wife for s 75(2) factors on account of the matters explained at [137].
The appellant asserted “that there was no proper nor logical basis to make any adjustment in favour of the wife on account of a “premature distribution of assets””.[12] The primary judge did not do so.
[12] Case Summary, Filed for the Appellant Husband, 28 August 2015, [45].
From the passage that we have quoted from [137] of the Reasons for Judgment (see [66] above) the primary judge’s reasons for making an adjustment of 11 per cent in favour of the wife were demonstrably clear. In addition, her Honour dealt specifically with the s 75(2) factors at [106] – [112]. Importantly, at [108] the primary judge noted that “[i]t was acknowledged by the husband’s counsel that the husband had a greater earning capacity than the wife, although he observed that the focus had been on the husband’s gross business earnings rather than net earnings”.
At [109] the primary judge noted that “[i]t is clear that the husband has demonstrated a significantly higher earning capacity than the wife, who during the marriage of some twenty years was the primary carer of the children. This is a matter to take into account pursuant to s 75(2)(k)”.
Her Honour went on to note that at [109] that the wife had made a large number of job applications before she obtained her present income and that her gross income was $1,410 per week compared to the husband’s income of $3,552 a week.
These matters, in our view, were clearly enunciated by her Honour and provide a justification for an adjustment in favour of the wife. However, under s 75(2)(o), as we have pointed out, her Honour took into account at [137], in addition, that the husband’s various expenditures indicated that he had funds available to him post-separation (which he had spent) which emphasised his “much greater financial resources compared to those of the wife and his financial superiority compared to her”. The primary judge regarded this as a “significant consideration”[13] to be taken into account in an assessment of s 75(2) factors.
[13] [2014] FCCA 2424, Reasons for Judgment, 24 October 2014, [137].
It is clear therefore, the primary judge considered in the exercise of her discretion that the difference in earning capacity and the difference in financial resources justified an adjustment of 11 per cent.
The primary judge did not take into account irrelevant matters or fail to consider relevant matters and accordingly there was no basis for a conclusion that an adjustment of 11 per cent was outside the generous ambit of discretion available to the primary judge.
In so far as it was asserted that there were inadequate reasons for the 11 per cent adjustment we also reject that assertion. Having regard to the matters that we have discussed, her Honour’s findings were succinct but nevertheless adequate. The law in respect of adequacy of reasons is well settled and has frequently been referred to (see for example, In the Marriage of Bennett and Bennett (1991) FLC 92–191 citing in particular at 78,266, Sun Alliance Insurance Ltd v Massoud [1989] VR 8; (1990) 14 FamLR 397; and Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378. Central to the adequacy of reasons is the consideration that parties need to know why a decision is being made and the reasons of the Court should deal with the substantial points raised by those parties (see Carlisle Homes Pty Ltd v Barrett Property GroupPty Ltd [2009] FCAFC 31 at [45] citing Hunter v Transport Accident Commission (2005) 43 MVR 130).
In our view, the reasons for the primary judge reaching the conclusion that she did are clear and there is no merit in this ground.
For these reasons we find no merit in grounds 6 and 7.
Grounds 8, 9 and 10 — Giving too little to the husband
Grounds 8, 9 and 10 asserted:
8. That Her Honour erred by giving insufficient weight to the overwhelming financial contributions of the husband during the relationship and post-separation (see paragraphs 90, 91 and 92 of the judgment) .
9. That Her Honour when making her overall determination on property adjustment, erred in that Her Honour:
(a)Failed to consider properly;
(b)Gave insufficient weight to and/or
(c)Undervalued
the contributions made by the appellant both financial and non-financial namely assets brought into the marriage, during the marriage and particularly his substantial post separation contributions.
10. That Her Honour erred in the exercise of Her discretion by assessing the husband’s overall contribution-based entitlement to be only 55%.
The comments that we have made in relation to discretionary judgments regarding grounds 6 and 7 at [61] – [62] above are also pertinent to grounds 8, 9 and 10 and we do not intend to repeat them. The primary judge assessed contributions at [65] – [98] inclusive and in the course of that assessment noted that at cohabitation the husband owned land “upon which there had been some work towards the construction of a house”.[14] The primary judge noted that the husband said at cohabitation he had a motor vehicle, and some trade tools and there was a mortgage of about $70,000 secured over the property. Her Honour noted “these sums were not disputed”.[15]
[14] Ibid [65].
[15] Ibid.
Her Honour dealt with disputed evidence about construction on the property before the parties lived together and concluded after analysing the evidence at [70] that,
[w]hile it cannot be established that there was an equity of $217,000.00 at cohabitation, there can be little doubt that the husband made a very significant initial contribution by bringing this asset into the relationship even if the equity cannot be precisely ascertained on the basis of the evidence before the court.
At [71] her Honour found that the wife brought no significant assets into the relationship.
Her Honour then dealt with the contributions of each of the parties throughout their relationship observing that at one point as a result of an injury sustained at work the husband was on workers’ compensation for a year and a half. Her Honour then set out that it emerged from the evidence that the husband had partial workers’ compensation payments for some years and there were “a number of breaks in the husband’s employment”.[16] Her Honour said,
… [i]t seems that from some months prior to the move to [Suburb F] and up to 2009 the husband did not always have regular work and that he relied totally on workers’ compensation payments for at least a year and half after April 2002 and then on a combination of some work and partial workers’ compensation payments … It does not seem that the husband was earning any very substantial income over these years.[17]
[16] Ibid [78].
[17] Ibid.
Her Honour dealt with the wife’s employment and her cessation of work when their daughter was born. She then dealt with disputed evidence regarding the amount of work the wife did in the husband’s business, the increased borrowing necessary to meet outstanding credit card debts of the parties and some funds provided by the wife’s parents to the house and the purchase of a truck.[18] Her Honour observed that since 2010 the husband had been very successful in his work in the fields of education and training and set out the husband’s earnings between 2011 and 2013.
[18] Ibid [85].
Her Honour dealt with the acquisition of the B and F properties during the marriage. She noted that the post-separation financial contributions of the husband were ““enormously significant” and greatly outweighed those of the wife”.[19] She noted that his contributions had reduced potential debt and “thus allowed assets to be retained though they have not substantially increased the value of the assets”.[20]
[19] Ibid [87].
[20] Ibid [90].
Her Honour observed at [91] that “[t]he wife acknowledged that the husband’s overall financial contributions were greater than hers” and found them to be so.
Her Honour then considered non-financial contributions at [93] – [96] and concluded that the husband, by his labour, contributed significantly to the Suburb D house and that the wife provided assistance but that her contribution was less than that of the husband.
Finally, her Honour discussed contributions to the welfare of the family including contributions made in the capacity of homemaker or parent. Her Honour observed that the wife was “not challenged about her evidence at hearing and the court [found] that the overwhelming contributions to homemaking and parenting during the relationship were those made by the wife”.[21]
[21] Ibid [98].
At [99] – [105] her Honour then summarised the position noting that the parties were in a relationship for approximately 20 years and both had made important contributions. At [105] she concluded that the husband had made an important initial contribution, worked for most of the relationship and his income was used for family expenses including in relation to the parties’ property. She acknowledged there was a contribution from the wife’s family as well as periods when the wife was employed. She observed that the wife had made the overwhelming contributions to homemaking and parenting during the relationship and that in the post-separation period the husband had met debts and expenses in relation to the properties. Taking all these factors into account she concluded there should be an adjustment of contributions of 55 per cent to the husband 45 per cent to the wife. In coming to her conclusion her Honour referenced authorities which, in our view, are germane.
In Petruski & Balewa [2013] FamCAFC 15 the Full Court said at [49]:
The task of assessing contributions under s 79 of the Act is an holistic one; what is required is to evaluate the extent of the contributions of all types made by each of the parties in the context of their particular relationship (Dickons & Dickons [2012] FamCAFC 154) …
In In the Marriage of Money and Money (1994) FLC 92–485 at 81,054; (1994) 17 FamLR 814, Fogarty J said:
… [R]espective contributions of the parties over a long period of marriage may “offset” the significance which might otherwise be attached to a greater initial contribution by one party … ultimately, when it comes to the trial such a contribution is one of a number of factors to be considered. The longer the marriage the more likely it is that there will be later factors of significance, and in the ultimate the exercise is to weigh the original contribution with all other, later, factors and those later factors, whether equal or not, may in the circumstances of the individual case reduce the significance of the original contribution.
In Pierce v Pierce (1999) FLC 92–844 at 85,881; (1998) 24 FamLR 377 the Full Court said at [28]:
In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution ...
This weighing of various contributions over a long marriage is the “holistic” analysis required by s 79 of the Act as the Full Court explained in Dickons & Dickons (supra). In s 79(4) of the Act in particular, as the primary judge noted, homemaker and parenting contributions are to be given significant weight (Fogarty J in In the Marriage of Waters and Jurek (1995) FLC 92–635 at 82,379; (1995) 20 FamLR 190; and Fields & Smith (2015) FLC 93–638).
The primary judge did not fail to take into account any relevant matter nor take into account any matter that was irrelevant. The holistic assessment of contributions over a 20-year relationship, small net asset pool, and very significant homemaker and parenting contributions by the wife does not sound in any error in the exercise of discretion. It should not be overlooked, in addition, that whilst the complaint in ground 10 was that her Honour assessed the husband’s contribution-based entitlement to be only 55 per cent, that the husband’s position as advocated to the primary judge was that he should have a finding of 60 per cent contribution-based entitlement, a difference of 5 per cent.
Grounds 11 and 12 – Manifestly unjust result from the exercise of discretion
Grounds 11 and 12 asserted:
11. That Her Honour erred in the exercise of her discretion in that the overall result was outside the generous range of discretion available to her and therefore was not just and equitable as between the parties.
12. That in assessing the overall entitlements of the parties Her Honour failed to have regard to the relatively small size of the net asset pool.
Such general assertions are usually misplaced and the Court has explained that on a number of occasions including in Babett & Falconer (2015) FLC 98–067 at 96,728 – 96,730 (“Babett”) and Elford & Elford (2016) FLC 93–695 at 81,122 – 81,124. That explanation as it appears in Babett bears repeating:
31. It is by no means uncommon to see grounds of appeal framed in terms identical, or similar, to Ground 3 in this appeal. That such a contention of discretionary error can be made might be seen to emanate from the concluding part of the frequently-cited passage from the judgment of their Honours, Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499, 504, 505 (“House”). Their Honours, having set out specific errors that might inform discretionary error, said:
… the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance.
32. Their Honours’ statement in House makes it clear that the conclusion of unreasonableness or injustice must be so “plain” that it permits of an inference that there has been a failure to “properly” exercise “the discretion which the law reposes in the court of first instance” …
33. Earlier statements by the High Court have emphasised the “very wide discretion” inherent in s 79 (Mallett v Mallett (1984) 156 CLR 605,608). That very wide discretion can be seen to be an example of where “… the relevant considerations are confined only by the subject-matter and object of the legislation which confers the discretion” and, as a result, “the latitude” given to a trial Judge is “considerable”. By way of corollary, “… it is never enough that an appellate court, left to itself, would have arrived at a different conclusion” (Gronow v Gronow (1979) 144 CLR 513, 519 per Stephen J).
We are not satisfied that the primary judge’s exercise of discretion miscarried in any way and accordingly there is no merit in these grounds.
Conclusion
The appeal must be dismissed.
Costs
Section 117(1) of the Act provides that subject to certain considerations, each party to proceedings should bear their own costs. In considering whether an order for costs should be made against the husband regard was had to the relevant factors set out in s 117(2A) of the Act. In our view, within the meaning of s 117(2A) there were justifying circumstances in this case for an order for costs to be made in the wife’s favour. The husband was wholly unsuccessful in the appeal and the grounds relating to the structure of the orders were misconceived and could, if sought, have been dealt with by agreement between the parties under the slip rule. The remaining grounds for the most part dealt with discretionary areas and justified an order for costs.
Given the financial position of the parties, neither party sought to suggest that there was any financial reason at least why an order for costs should not be made in favour of the respondent and the orders which we made at the time of the hearing provided for this outcome.
I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Kent and Cronin JJ) delivered on 23 August 2017.
Associate:
Date: 22 August 2017
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