AM & MM

[2005] FamCA 443

[2005] FamCA 443

FAMILY LAW ACT 1975

IN THE FULL COURT       
OF THE FAMILY COURT OF AUSTRALIA                   Appeal No EA83 of 2004
AT SYDNEY  File No NCF570 of 2003

BETWEEN:

AM
Appellant Husband
- and -

MM
Respondent Wife

REASONS FOR JUDGMENT

CORAM:  KAY, COLEMAN & BOLAND JJ
DATE OF HEARING:                 4 April 2005
DATE OF JUDGMENT:             18 May 2005

APPEARANCES:  Mr Lethbridge, Senior Counsel, instructed by Mr Ken Lee, Solicitor, 82 Marine Parade, Kingscliff, NSW 2487, appeared on behalf of the Appellant Husband.

Mr Loomes of Counsel, instructed by Anne Gillin, Solicitor, Suite 7, Credit Union Arcade, 40 Bowra Street, N Heads, NSW 2448, appeared on behalf of the Respondent Wife.

AM and MM

Appeal No:     EA83 of 2004

Coram:  KAY, COLEMAN & BOLAND JJ

Date of Hearing:                4 April 2005

Date of Judgment:            18 May 2005

Catchwords: PROPERTY SETTLEMENT – cohabitation less than 8 years - asset pool of $2.25 million – husband’s initial contribution to pool of assets found to be between $500,000-$550,000 - unchallenged evidence that the assets brought into the marriage by the husband were at least $571,000 to $591,000 plus car and furniture (claimed to be worth a further $57,000) – material error – appeal allowed - in accordance with principles in Allesch v Maunz (2000) 203 CLR 172 parties to make written submissions as to evidence they wish to adduce relating to their circumstances as they presently exist before determining the manner in which the appeal should be finally concluded – costs certificates granted.

1. This is the husband’s appeal against property orders made by Moore J on 13 July 2004.  Her Honour ordered that the wife should be entitled to receive 36 per cent of a pool of assets valued at $2,252,637.  This required a payment of $520,000 to the wife by the husband.

1. In his Notice of Appeal the husband seeks to reduce the sum payable to the wife to $300,000 or alternatively have the matter remitted for rehearing.

1. At the appeal hearing his counsel indicated that if the Court was moved to allow the appeal he would ask for the opportunity to put further evidence before the Court relating to the valuation of assets and liabilities.

1. On 12 April 2005 we received further written submissions from the wife's counsel dealing with the admissibility of evidence contained in the husband's affidavit of the value of a property owned by him at the commencement of cohabitation.

Background

1. The trial Judge found that the parties now both aged 50 began to live together in February 1995.  After two other periods of separation they finally separated in June 2002.  There were two children born of the relationship, F born 1995 and M born 1997.  They have remained living with their mother since separation.

1. At the commencement of cohabitation the wife had three children from a previous marriage, B, C and D all under 18 years of age.

1. At the time cohabitation commenced the wife was working at a large bank in a costal New South Wales town and the husband was a teacher at another costal New South Wales town.  The wife owned a home in the town that she worked and had an equity of $90,000 in it.  The parties lived at that home for the first three years of their relationship. 

1. At the commencement of cohabitation the husband had a property at R Point (‘R Point 1’).  It was unencumbered.  He also had a half interest in a property with his brother at R Point (‘R Point 2’).  That property was also unencumbered.  He owned a property at L Head that he had acquired two years earlier, contributing $36,000 from his savings towards the purchase price and borrowing the balance of $128,000 from a bank.  He had a further property at N Heads that he had acquired by borrowing monies from the bank.  His total indebtedness to the bank on the N Heads and L Head properties came to $263,000.

1. Her Honour also found that the husband had superannuation entitlements of $49,159 and savings of $26,000 at the time of the commencement of cohabitation.

1. By the time of separation the L Head and N Heads properties had been sold.  The husband retained his ownership in the two R Point properties, having acquired his brother’s half interest in R Point 2 for $400,000 in 2002, just after separation.

1. Her Honour found that the parties had the following list of assets:

Husband

Assets:

R Point 1  980,000
R Point 2  925,000
Funds in Commonwealth Bank             5,757
Funds in ANZ and Westpac  10,833
ASGARD           22,000
IAG shares (1354) as at 23/6/04           6,946
CBA Managed Fund Share Portfolio           10,645
Loan offset facility  172,000

Legal fees            24,000

1991 Motor vehicle   2,000

Superannuation - First State  267,655
Superannuation - Anglican Church          5,306
  2,432,142

Liabilities:

Mortgage  450,000

Commonwealth Bank Visa             1,044
ANZ Visa              793

Land tax           17,221

Accountant’s fees                 891

469,949

Husband’s net assets:   1,962,193

Wife

Assets:
Wife’s home  250,000
2001 Motor vehicle   15,000
Commonwealth Bank account  172
Shares Commonwealth Bank/IAG            8,397
Westpac account  42
Legal fees – wife           1,650
Daughter’s car cost                      7,500

Superannuation - Commonwealth Bank    18,091
  300,852

Liabilities:
Mortgage – Commonwealth Bank           5,500
Loan from mother           1,800
Visa  2,488

Mastercard             400
Accountants fees                220
           10,408

Wife’s net assets:                    $290,444

Total net assets:   $2,252,637

1. In determining an appropriate division of this asset pool Moore J evaluated the respective contributions in the ratio of 69:31 in favour of the husband then allowed the wife a further 5 per cent for s 75(2) factors under the Family Law Act 1975.

1. This appeal turns entirely upon her Honour’s assessment of the contributions of the parties, and in particular upon the value placed upon the husband’s initial contributions.

1. Her Honour appears to have valued the R Point 1 property at $300,000 accepting an assertion by the husband that was what it was worth, and saying “[t]hat is an estimate not contradicted by the appraisal annexed to the wife’s affidavit”.

1. Her Honour valued the property at R Point 2 as “worth in the vicinity of $320,000 to $360,000 according to the appraisal annexed to the wife’s affidavit”.  She then went on to say:

“16.[AM] estimated the value of his property at the time they started living together at around $635,110 and an analysis of the evidence suggests this might be a bit optimistic and a reasonable approximation would have been in the order of $500,000-$550,000.”

1. The reference to the appraisal annexed to the wife’s affidavit is to a document dated 25 November 2002 on the letterhead of a real estate agent, addressed to the wife, which read:

“RE: [R POINT 1 & 2]

Thank you for kindly asking me to inspect your family home [in]…November 2002.

We carried out a routine drive bye (sic) inspection and evaluation of the family home, searched relevant databases for comparisons of values dated around the January 1995 - November 2002.

Although all care and professionalism was taken for this report they are only guides of values and are not sworn valuations and cannot be used as such.

THE FOLLOWING IS OUR ESTIMATION OF VALUES

The [R Point 2] home – a double brick art-deco home comprising 3 bedrooms.  The home has position that if incorporated correctly may yield some water & city views, [R Point 1] is a 2 bed 2-storey home of similar type but features are of better condition.

We estimate the current market value [R Point 2] of this home to be in the vicinity of $790,000 - $830,000 and [R Point 1] to be in the vicinity of $850,000 - $960,000 however we feel the properties may achieve more. 

We also estimate (As of 1995) the same property situated at [R Point 2] to be in a vicinity of $320,000 - $360,000 and [R Point 1] to be in the vicinity of $330,000 - $365,000. 

Our recommendation is to market the home by Public Auction, however we are also comfortable if you instruct us to market with an asking price.”

1. In assessing the relevant contributions of the parties to the assets as they stood at the time of the trial her Honour noted that the counsel for the husband submitted the wife’s contribution should be assessed at 25 per cent of the net value of assets whilst counsel for the wife contended they should be 33 per cent in her favour.  She said:

“27.     The parties’ relationship lasted for around 7 ½ years and was punctuated with two relatively lengthy separations.  Another two years has passed since their final separation.  They each came to the relationship with assets, though there was a considerable disparity in the value of what they owned at the time, and they have used those assets in the ways discussed earlier.  Over subsequent years they have each contributed in the various ways identified by s 79(4)(a)-(c).” 

1. Her Honour then evaluated the contributions made during the course of the relationship saying:

“30.When all this is balanced, I find they made equal efforts and their contributions up to now should be seen as approximating equality save for one factor:  the disparity in their initial asset position…”

1. Her Honour then cited from Full Court judgment in Pierce (1999) FLC 92-844 where the Court said:

   "28.     In our opinion it is not so much a matter of erosion of contribution but 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.  In the present case that use was a substantial contribution to the purchase price of the matrimonial home: See also Campo and Campo (unreported, Full Court (Ellis, Lindenmayer and Finn JJ), Sydney, delivered 19 May 1995 at pages 21 and 22 of the joint judgment) and Zahra and Zahra (unreported, Full Court Sydney, delivered 3 October 1996, per Ellis J. at page 10)."

2. She then went on to say:

“31.In the present case, the disparity in early 1995 in the value of the assets they brought to the relationship was of significant proportions.  The wife’s home provided the family accommodation for about 3 years until they moved…and it has provided the housing for the wife and children in the 2 years since separation.  The husband’s properties have been used variously to reduce debt on the home the parties’ purchased jointly or to carry out improvements on the property that housed [AM] for the 3 years he lived in [a main New South Wales city]. 

32.When that and all of their other contributions over the years is considered and weighed in the balance, it is my assessment that their contributions should be seen in the proportions of 31% to the wife and 69% to the husband.  That would entitle [MM] to receive assets to the value of $698,317 and [AM] to receive assets to the value of $1,554,320.  But that is not to say their net assets are to be divided in those proportions.” 

1. Her Honour then turned to examine the s 75(2) factors concluding that a significant factor was the wife’s primary responsibility of the care of the children. She also identified the disparity in future earnings of the parties and determined there should be an additional 5 per cent in favour of the wife.

The Appeal

1. As already indicated, the Appeal was seen to focus entirely upon her Honour’s assessment of the contribution of the parties.  It was submitted that her Honour was in error in her finding in paragraph 12 that the husband’s assets had a value of between $500,000-$550,000 and that the consequence of that error was that she had failed to attach appropriate weight to the value of the assets introduced into the relationship by the husband and their significance at the date of trial.

The evidence as to value

1. In his affidavit filed 26 May 2004 the husband deposed that at the commencement of cohabitation he owned the R Point 1 property “which I estimate was valued at $300,000”.  He deposed that he and his brother owned the R Point 2 property.  It was unencumbered by August 1994 but he attributed no value to it as at the date of commencement of cohabitation.  He deposed he owned the L Head property that he had purchased in March 1993 for $165,000, contributing $36,000 to the purchase price from savings and borrowing the balance of $128,000.  He then purchased a property at N Heads in December 1993 for $131,000 but deposed that he had borrowed $135,000 from the bank to complete the purchase.  His evidence appears to be a little confusing as he went on to say “I contributed only a small amount towards the purchase i.e. $4,000.00.00 (sic) as I was able to negatively gear it.”

1. In addition to his interest in the four pieces of real estate the husband deposed that he had:

·    a superannuation entitlement with State Super at an estimated value of $49,159.88 as at 30 June 1995;

·    a 1997 motor vehicle, estimated value $5,000;

·    furniture with an estimated value $50,000; and

·    $26,082.93 in a bank account, including the surrender value of life insurance policy.

1. He deposed that he estimated his total worth prior to the commencement of cohabitation to be $635,110.

1. How that sum was arrived at was not explained as no value was attributed in the affidavit to the husband’s equity in R Point 2.

1. In her affidavit the wife asserted that the husband acquired the N Heads property by borrowing 100 per cent of the purchase price.  She understood that he had put about $30,000 into the L Head property.  She relied upon the letter from a real estate agent that gave estimates of the values of the properties at R Point 1 and R Point 2.

1. The issue of initial contribution does not appear to have been the subject of any cross examination of either of the parties.

1. In final addresses counsel, then appearing on behalf of the husband, said:

“It is a substantial estate, but it is also a matter where it is common ground (indistinct) that the infrastructure for the generation of this pool was clearly made or created by the husband at the time the parties commenced to live together in a de facto marriage relationship which the wife put as at February 1995.  The husband, carrying out some mathematics of his own, was of the opinion that he had assets totalling $635,110 as at October 1995…”

1. He went on to submit that an appropriate assessment on contributions was 25 per cent in favour of the wife with a further 5 per cent adjustment for s 75(2) factors. On his calculations that would have entailed a payment to the wife of about $415,000 over and above the assets she would otherwise retain in her own name.

1. Mr Loomes on behalf of the wife drew her Honour’s attention to the existence of the real estate agent’s estimates of value in the annexure to the wife’s affidavit.  The following discussion took place:

“MR LOOMES:         …In [MM’s] affidavit annexure A, there is present in that annexure without objection estimates of the values of the property at about the time that the parties commenced living together.

HER HONOUR:        Annexure A?

MR LOOMES:          Annexure A to [MM’s] affidavit sworn of 4 May 2004, filed on 5 May 2004.  You will see there, your Honour, that the estimate of the current market value of [R Point 2] is given, but the property is given an estimate for 1995, and [R Point 2] is valued at $320,000 to $360,000.  [R Point 1] is valued at $330,000 to $365,000.

HER HONOUR:        Just pausing there, I meant to ask before now, I know that [AM] has given some estimates of the value of his property at the time that the relationship began, and I meant to check whether he’d actually incorporated this evidence into those figures or not. 

MR LOOMES:          Sorry, your Honour.  When you say gave evidence about his value at the time, was that given by my friend in his submissions or was it evidence per se?

HER HONOUR:        No, his affidavit, paragraph 116.  [R Point 1], and he prefaces this:

At the commencement of cohabitation, I contributed the following assets and interests.  1. [R Point 1], which I estimate was valued at $300,000. 

He’s about right isn’t he?

MR LOOMES:          Yes.

HER HONOUR:        And then [R Point 2], he says they purchased it in July 1998.  He’s wrong about that, it’s actually 1988 he means.  I don’t think he gives a value of that one for how much that was worth.

MR LOOMES:          [R Point 2] was, by agreement all round, July 1986. 

HER HONOUR:        1986, you’re right about that, yes.  Then he says in his affidavit the debt was paid off by August 1994, which is the year before they started living together on your client’s evidence, a couple of months before they started living together on his evidence.  So that was an unencumbered property at the time, and this evidence of your client’s in annexure A suggests that it was worth between $320,000 and $360,000.

MR LOOMES:          Yes.  That’s right.  Of course, we halve that, whichever figure your Honour decides is the more appropriate.”

1. Her Honour and counsel, then appearing on behalf of the husband, then had a discussion relating the N Heads and L Head properties, seeking to clarify evidence about the debts relating to those properties and agreement seems to have been reached between them in a discussion was that there was only one consolidated debt from the ANZ Bank in the sum of $233,963.  The discussion continued:

“MR LOOMES:         His debt in 1996 was $250,000, so it has crept up a bit.

HER HONOUR:        I’m just checking his figure, which you didn’t challenge, Mr Loomes so I don’t know why I’m checking it, is that he was worth $635,110 at the time they started living together.  Because I’m suspicious and careful, I’m just picking over what he says about how he arrives at that figure.

MR LOOMES:          That’s my omission, your Honour.  I should have confronted him about that.  I’ve gone about it by picking at the elements rather than confronting that bald allegation.

HER HONOUR:        The only thing that’s a mystery, I suppose, is really the debt that was owing on N Heads and L Head.  Does he say that anywhere…?

[THEN COUNSEL FOR AM]:         As far as the debt?

HER HONOUR:        The debt on those two properties at the time they got together.

[THEN COUNSEL FOR AM]:         Yes, I think he’s referring to the commencement of cohabitation, paragraph 116, so the $233,963 has to be spread over…L Head and 94…N Heads, and all we have is the purchase prices of each of those properties.”

1. There is then further discussion trying to clarify the figures.  Her Honour said:

“And what he says is that on the first one at L Head which he bought in March, 18 months before they started living together, he borrowed $128,000.  In the normal course of things on a rental property like that, he wouldn’t have been reducing the debt, would he?  It was probably still around $128,000 18 months later when he started living with [MM].

[THEN COUNSEL FOR AM]:         That’s so, your Honour.

HER HONOUR:        Nothing was said of any reduction of the capital in the meantime, was it?  Would I be wrong to just roughly check his figure by suggesting that L Head still had a debt of $128,000, 18 months later?

[THEN COUNSEL FOR AM]:         It seems as though there must have been.  In view of the fact that he borrowed $128,000 for the one and $131,000 for the other, that’s a total of $259,000.

HER HONOUR:        I know that he refinanced in 1996 for $250,000, so that just confirms the joining of the dots, doesn’t it, that probably he had a debt of about $250,000, $260,000, at the time on those two houses.  Am I right in all of that?

[THEN COUNSEL FOR AM]:         Yes.  I’m told it’s pretty close, your Honour.”

The question of the initial contribution by the husband was not returned to at all in the discussion between the Judge and counsel.

1. In her reasons for judgment as already indicated the trial Judge said at paragraph 12:

“[AM] estimated the value of his property at the time they started living together at around $635,110 and an analysis of the evidence suggests this might be a bit optimistic and a reasonable approximation would have been in the order of $500,000- $550,000.”

1. This conclusion is not explained at all by her Honour nor is any analysis of the evidence carried out by her.  Putting the most favourable light possible to the wife on all of the evidence that was before her Honour, the husband’s initial contribution consisted of:

·    R Point 1, the husband’s valuation $300,000;

·    half interest in R Point 2 using wife’s estimate between $160,000 and $180,000;

·    equity in L Head $36,000;

·    superannuation entitlements $49,159; and

·    savings $26,000. 

1. This creates a total range of $571,159 to $591,151 which calculations totally ignore the husband’s evidence relating to the value of his car and furniture that he put in at $57,000 and about which he was not challenged.

1. In his submissions before us Mr Lethbridge, SC on behalf of the appellant submitted that rather than accepting the husband’s estimate as to the valuation of R Point 1, her Honour ought to have accepted the mid-point of the range put on the property by the real estate agent, namely $347,500.  That would have increased the value of the contributions initially by a further $47,500.

1. We accept the trial Judge was faced with a practical difficulty in circumstances where the husband placed no admissible evidence before the Court about the value of his pre-cohabitation assets and liabilities.  In these circumstances it was not necessary for the trial Judge to make any findings relating to the value of these properties as at the date of commencement of cohabitation.  There was no precise evidence about it.  It would have been sufficient for her Honour to have simply set out the estimates put on the properties by each side and to have concluded that the husband made substantially greater contributions than the wife without attempting to quantify them further and to have then sought to evaluate those contributions together with the balance of the contributions made by the parties during the course of their relationship to reach the intermediate step required by the authorities to explain how she reached the order which is ultimately seen to be just and equitable. 

1. Issues surrounding the value of the husband’s assets at the date of commencement of cohabitation that were dependent upon opinion evidence could only be resolved if there was any admissible evidence before the Court. Section 76(1) of the Evidence Act 1995 (Cth) prohibits the admission of opinion evidence. Section 79 creates an exception based on specialised knowledge. There was nothing before her Honour to indicate that the husband had such specialised knowledge that would qualify him to give any opinion as to the value of his real estate or chattels. The evidence of the wife’s real estate agent was so guarded as to be of little probative weight. In those circumstances it is impossible for us to see how her Honour could have either accepted or rejected the husband’s evidence as to the value of his initial contributions if they were in issue. It would seem that they were not. It follows we do not accept the written submissions of the wife’s counsel in which he relies on a passage in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 75 at paras 87-89, a passage which deals with the evidence of an expert not a lay person, “that it was quite open to Justice Moore to…accept a specific estimate on one property at $300,000.00.”

1. As is conveniently set out by the Full Court in Hickey v Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at para 39:

“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case…”

1. The difficulty here however is that in identifying and assessing the husband’s initial contributions her Honour made a specific finding as to the value of those assets which finding does not appear to be in accordance with the most liberal interpretation of the evidence that was before her.  In reality the extent of the husband’s initial contributions was not a matter of contention.  What was in contention was the weight to be attributed to those contributions in light of the balance of the contributions made by the parties in the course of their relationship.

1. What then is the effect of incorrect assessment by the trial Judge of the value of the husband’s property at the time the parties started living together?  Gibbs J in De Winter v De Winter (1979) 23 ALR 211, (1979) FLC 90-605; (1979) 4 Fam LR 583 said:

“The question is whether the invalid reason has influenced the ultimate conclusion, or whether the error was immaterial;  if the error did affect the conclusion, the result may nevertheless be so plainly right that it can be allowed to stand notwithstanding unsoundness of some of its foundations.”

1. In the scheme of assessing contributions to a pool of assets now said to be worth $2.25 million in a marriage where cohabitation was less than eight years an error in assessing the value of the assets brought in at the commencement of the cohabitation that ranges between her Honour’s conclusion of $500,000-$550,000 as against the unchallenged evidence of at least $571,000 to $591,000 plus car and furniture (claimed to be worth a further $57,000) could not, in our view, be said to be so immaterial as to have no bearing on the outcome of the case.  Given the generous range of discretion available to the trial Judge, it is not open to the Court to say that the result reached by the Judge was plainly right.  There was no plainly right answer to the question of what was an appropriate order to be made in this case. Accordingly once a material error is detected then we must set aside the orders made unless in a re-exercise of discretion we coincidentally reach the same result that the trial Judge reached.

1. As already indicated, given the magnitude of the error in the finding, we are of the view that her Honour’s assessment of the contributions cannot be upheld.

1. Mr Lethbridge submitted that in the event that we should find that the appeal was upheld, then he wished the opportunity to lead further evidence to update the asset pool with particular reference to valuation of the real estate and the impact of capital gains tax that would be brought about by the necessity to realise assets to meet any order sought.  Mr Loomes’ primary position was that the Full Court would be in a position to re-exercise the discretion without any further evidence but accepted that in light of the High Court’s expressed views in Allesch v Maunz (2000) 203 CLR 172; (2000) FLC 93-033 it would become necessary for this Court to offer the parties an opportunity to put before the Court submissions as to the further disposition of the appeal.

1. In their joint judgment in Allesch v Maunz Gaudron, McHugh, Gummow and Hayne JJ said:

“[30] Although, on an appeal by way of rehearing from a discretionary judgment, an appellate court may, itself, exercise the discretion in question by reference to circumstances as they then exist, it is not bound to do so. It may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s 94(2) of the Act ‘order a re-hearing, on such terms and conditions, if any, as it considers appropriate’. And where circumstances have or are likely to have changed between the original hearing and the disposition of the appeal, it is not uncommon for an appellate court to remit the matter for rehearing rather than, itself, exercise the discretion in question.

[31]     If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances.”

1. It may well be that the matters of further evidence as to valuation of assets and the capital gains tax implications that arise by reason of forced sale of real estate in order to meet the orders of the Court are not contentious and can be the subject of an agreed statement of relevant facts.  It may also be that if the matters remain in contention it will become necessary for this Court to remit only an issue relating to valuation whilst reserving to itself the capacity to determine an appropriate division of the assets.

1. If it is of some assistance to the parties in endeavouring to avoid further expenditure in this matter, we would indicate that on the pool of assets as found by the trial Judge, and given the limited nature of this appeal, we would assess the relevant contributions of the parties to the pool of assets as found by trial Judge in the ratio suggested at trial by counsel, then appearing for the husband, namely 75 per cent in favour of the husband and 25 per cent in favour of the wife.  This would create a greater disparity in the capital position of the parties then that determined by her Honour.  

1. We would assess the adjustment that ought to be made by reference to the balance of the factors identified by her Honour under s 79(4) in a further sum of 7.5 per cent of the asset pool.  These factors include:

·    the capital disparity;

·    the disparity in the ability of the parties to earn income;

·    the wife’s obligation to care for the children;

·    the husband’s obligation to pay child support; and

·    the husband’s contributions to the support of the wife’s children from her first marriage.

1. The appropriate division of the pool would thus be 67.5 per cent in favour of the husband and 32.5 per cent in favour of the wife.

1. If no adjustments are made to the asset pool as found by her Honour this would result in a reduction in the wife’s entitlement under her Honour’s orders by $79,000.

1. Whilst we feel confident we could re-exercise the discretion on the material that is before us and avoid further proceedings, we invite the parties to make submissions in writing to the Full Court as to any evidence they would wish to adduce relating to their circumstances as they presently exist.  We await the receipt of such submissions before determining the manner in which the appeal should be finally concluded.

Costs

1. Each party has sought a costs certificate under the terms of the Federal Proceedings (Costs) Act 1981 should the appeal be allowed. In the circumstances we think it is appropriate that such certificates be granted.

Orders

1.      That the appeal be allowed.

2.      Order 1 of the orders made by the Honourable Justice Moore on 13 July 2004 be set aside.

3.      That we adjourn for further consideration what order if any ought to be made in substitution therefore.

4.      That within 21 days of the delivery of this judgment the appellant husband file with the Appeals Registrar, Sydney and serve upon the respondent wife any further submissions and material in support thereof upon which the husband seeks to rely in respect of his request that the determination of the property appeal be remitted for rehearing rather than to have the Full Court exercise its own discretion in the matter.

5.      Within 14 days of the receipt of such submissions the respondent wife file and serve any material in response thereto.

6. That the Court grants to the appellant a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant in respect of the costs incurred by the appellant in relation to the appeal.

7. That the Court grants to the respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the respondent in respect of the costs incurred by the respondent in relation to the appeal.

I certify that the 54 preceding
 paragraphs
are a true copy of the reasons
for judgment delivered by this
Honourable Full Court.

Elizabeth Hore
Associate